Tech View: Nifty50 forms Doji candle, breaching 11,300 a challenge

NEW DELHI: Nifty50 on Wednesday ended flat for the second straight session. As was the case on Tuesday, the index witnessed selling pressure near 11,300 level, while it formed a day’s low near 11,180, reflecting indecisiveness among investors. This was well-captured in the Doji candle the index formed on the daily chart.

“Nifty50 formed a Doji candle, but respected its 50-day EMA. The formation of higher lows on a daily scale indicates a bullish to range-bound undertone. The index needs to hold above 11,180 to move towards 11,333 and 11,450 levels. Major supports for Nifty50 are seen at 11,111 and 11,000 levels,” said Chandan Taparia of Motilal Oswal Securities.

The index’s 50-day EMA stands at 11,178.

The 11,300 level is proving to be a critical hurdle as it also coincides with a 50-day simple moving average, whose value is placed at 11,306 level, said Mazhar Mohammad of Chartviewindia.in.

Check out the candlestick formations in the latest trading sessions

“Hence, a close above the said hurdle shall be considered as a sign of strength for the bulls, which can expand the pullback swing initially towards 11,413. We advise traders to create long positions only on a close above 11,300 levels,” Mohammad said.

For the day, the index closed at 11,226.50, up 4.10 points or 0.04 per cent.


Meanwhile, on the hourly charts, the index is forming a distribution below the 61.8 per cent retracement of the recent fall, which is also near 11,300, said Gaurav Ratnaparkhi of Sharekhan.

“On the higher side, 20-day moving average and upper end of a reverse falling channel are also there to restrict further upside. Thus, the 11,300 -11,350 is a crucial resistance zone for Nifty. Unless the index manages to cross these levels on a closing basis, it is likely to head lower,” he said.