Tech View: Nifty50 forms 'Hanging Man' on weekly chart; stay cautiously optimistic
NEW DELHI: Nifty50 reclaimed the 9,100 level on a closing basis on Friday, but formed a ‘Doji’ pattern on daily chart, suggesting continued indecisiveness among market participants amid lack of global cues.
On a weekly basis, the situation did not change much as the index formed a bearish candlestick called ‘Hanging Man’, which hints at the end to the prevailing uptrend. Analysts are cautiously optimistic on the market. They advised investors to use declines to make fresh longs.
“If this pattern on the daily chart is just because of profit booking over weekend, then bulls should resume their upmove next week, taking the indices beyond 9,218 levels. In the light of such a indecisive formation, we recommend traders to remain cautiously optimistic and hold or create fresh long positions with a stop below 9,048 on closing basis, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.
A breach of the level may threaten the recent low of 9,019, thereby resuming short-term downtrend, Mohammad said.
Nifty50 on Wednesday fell below its crucial 13-Day EMA only to see a recovery in the next two sessions. With Friday’s gains, the index is now ruling above its 5-day moving average.
The index opened above 9,100. It hit a high of 9,133.55 and low of 9,089.40 during the session. At close, the index was up 27.10 points, or 0.24 per cent, at 9,108. This was marginally higher than the opening price. This made the real green body quite small, with almost equal upper and lower wicks.
“The Nifty50 opened positive, but failed to continue its momentum and formed a Doji candle on the daily chart. Recently it took support at its 13-Day EMA and formed a bottom near to 9,020. It now needs to continue to hold above 9,075 to witness a buying interest towards 9,160 and 9,218. The range of 9,020-9,000 should to act as a major support, said Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal Securities.
On a weekly basis, the situation did not change much as the index formed a bearish candlestick called ‘Hanging Man’, which hints at the end to the prevailing uptrend. Analysts are cautiously optimistic on the market. They advised investors to use declines to make fresh longs.
“If this pattern on the daily chart is just because of profit booking over weekend, then bulls should resume their upmove next week, taking the indices beyond 9,218 levels. In the light of such a indecisive formation, we recommend traders to remain cautiously optimistic and hold or create fresh long positions with a stop below 9,048 on closing basis, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.
A breach of the level may threaten the recent low of 9,019, thereby resuming short-term downtrend, Mohammad said.
Nifty50 on Wednesday fell below its crucial 13-Day EMA only to see a recovery in the next two sessions. With Friday’s gains, the index is now ruling above its 5-day moving average.
The index opened above 9,100. It hit a high of 9,133.55 and low of 9,089.40 during the session. At close, the index was up 27.10 points, or 0.24 per cent, at 9,108. This was marginally higher than the opening price. This made the real green body quite small, with almost equal upper and lower wicks.
“The Nifty50 opened positive, but failed to continue its momentum and formed a Doji candle on the daily chart. Recently it took support at its 13-Day EMA and formed a bottom near to 9,020. It now needs to continue to hold above 9,075 to witness a buying interest towards 9,160 and 9,218. The range of 9,020-9,000 should to act as a major support, said Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal Securities.
