Tech view: Nifty50 forms Doji for second session; suggests weakness
, ETMarkets.com|
Updated: Oct 18, 2017, 05.03 PM IST
NEW DELHI: The Nifty50 struggled to hold above the 10,200 level on Wednesday and ceded ground to the bears. In the process, the index formed a ‘Doji’ pattern on the daily chart for the second consecutive session. A ‘Doji’pattern suggests indecisiveness among investors at higher levels.
The 10,250 level on the Nifty50 is crucial, said Vaishali Parekh, Head of Technical Desk at Prabhudas Lilladher. A sustainable breach above this level can lift the index towards the 10,350 level.
On the other hand, “The 10,120 level could offer strong support,” Parekh said.
The Nifty50 opened the day at 10,209, and hit a high and low of 10,236 and 10,175, before closing the day at 10,210. At close, the index was down 23.60 points, or 0.23 per cent. This was the first time in five sessions that the index could not make higher high and higher lows.
'Doji' patterns over two days after the formation of a Hanging Man pattern on Monday suggests an impending pattern, says Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
“Our twin momentum oscillators generated a sell signal, which has higher accuracy in catching short-term turning points. The Bank Nifty too appeared to have resumed its downswing with a gap-down opening, which remained unfilled by the end of Wednesday’s trade. The probability of extension of this correction can’t be ruled out,” Mohammad said.
Mohammad advised traders not to buy the dips in a hurry but to go long only on further strength above the 10,251 level.
The 10,250 level on the Nifty50 is crucial, said Vaishali Parekh, Head of Technical Desk at Prabhudas Lilladher. A sustainable breach above this level can lift the index towards the 10,350 level.
On the other hand, “The 10,120 level could offer strong support,” Parekh said.
The Nifty50 opened the day at 10,209, and hit a high and low of 10,236 and 10,175, before closing the day at 10,210. At close, the index was down 23.60 points, or 0.23 per cent. This was the first time in five sessions that the index could not make higher high and higher lows.
'Doji' patterns over two days after the formation of a Hanging Man pattern on Monday suggests an impending pattern, says Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
“Our twin momentum oscillators generated a sell signal, which has higher accuracy in catching short-term turning points. The Bank Nifty too appeared to have resumed its downswing with a gap-down opening, which remained unfilled by the end of Wednesday’s trade. The probability of extension of this correction can’t be ruled out,” Mohammad said.
Mohammad advised traders not to buy the dips in a hurry but to go long only on further strength above the 10,251 level.
