Any bounce in Nifty will be a sell on rise opportunity
A long bear candle has been formed in last week with minor lower shadow, as per weekly chart.
By Nagaraj Shetti
Technical research analyst, HDFC Securities Where we are: The downside momentum continued in the Nifty for the sixth consecutive session on Friday. A negative candle has been formed with long lower shadow. This daily candle pattern is resembling a bullish hammer pattern, but not a classical one. However this pattern is indicating an emergence of value buying at lows. We observe a range bound action with symmetrical price movement in Nifty in the last couple of months. Small bottom reversals have been formed after a weakness of about six sessions. Having declined for six consecutive sessions from the swing highs (11,118) and also a formation of long lower shadow of Friday’s candle, there is a high possibility of a small upside reversal in this week, probably resulting in lower highs.
What is in store: A long bear candle has been formed in last week with minor lower shadow, as per weekly chart. Technically, this pattern is indicating a formation of bearish belt hold line. Normally, a Bearish belt hold line is a top reversal pattern and signals weakness in the underlying. But being placed within a larger sideways range, the significance of pattern implication could be less.
What could investors do: The short-term trend of Nifty is weak. Being placed near a support and after a positive chart pattern, one may expect small upside bounce in the Nifty from near 10,585-600 levels in this week. The overall chart pattern of larger timeframe is indicating a possibility of minor upside bounce in the market, which could be a sell on rise opportunity. Sectorally, IT, capital goods, energy and media could outperform, while PSU banks, metal and pharma sectors could underperform over the near term.
Technical research analyst, HDFC Securities Where we are: The downside momentum continued in the Nifty for the sixth consecutive session on Friday. A negative candle has been formed with long lower shadow. This daily candle pattern is resembling a bullish hammer pattern, but not a classical one. However this pattern is indicating an emergence of value buying at lows. We observe a range bound action with symmetrical price movement in Nifty in the last couple of months. Small bottom reversals have been formed after a weakness of about six sessions. Having declined for six consecutive sessions from the swing highs (11,118) and also a formation of long lower shadow of Friday’s candle, there is a high possibility of a small upside reversal in this week, probably resulting in lower highs.
What is in store: A long bear candle has been formed in last week with minor lower shadow, as per weekly chart. Technically, this pattern is indicating a formation of bearish belt hold line. Normally, a Bearish belt hold line is a top reversal pattern and signals weakness in the underlying. But being placed within a larger sideways range, the significance of pattern implication could be less.
What could investors do: The short-term trend of Nifty is weak. Being placed near a support and after a positive chart pattern, one may expect small upside bounce in the Nifty from near 10,585-600 levels in this week. The overall chart pattern of larger timeframe is indicating a possibility of minor upside bounce in the market, which could be a sell on rise opportunity. Sectorally, IT, capital goods, energy and media could outperform, while PSU banks, metal and pharma sectors could underperform over the near term.
