Nifty outlook: Chandan Taparia of Motilal Oswal Securities said the longer lower shadow on the Nifty candle indicated support based-buying on declines. He believes the index needs to hold above 18,580 to witness an up move Nifty on Tuesday formed a Doji candle on the daily chart -- closing where it opened, suggesting indecisiveness among market participants. The lower wick on the daily candle was long, hinting at support-based buying on declines. The daily momentum indicator saw a negative crossover, which indicates that there could be a consolidation ahead, said analysts.
Tuesday was the fourth straight session of bearish candles on the NSE barometer. The real body of last three candles were narrow in nature. To be sure, the NSE benchmark has been trading above all its key short-term moving averages but the 14-day RSI has come off to 65.92 level in the recent days from overbought territory. The index has support in the 18,580-18,600 range, said analysts who expects the index to see upside resistance at 18,700 and 18,750 levels.
"Normally, Doji formations after a reasonable upmove or down moves calls for a reversal. But having formed amid range movement, the predictive value of this pattern could be less," noted Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Shetti said immediate support levels such as daily 10- and 20-period EMAs are intact and the intraday buying has been emerging so far from the supports in the short term.
"On the upper side, repeated testing of crucial hurdle around 18,600-18,700 levels is expected to result in decisive upside breakout. Immediate support is at 18,500 level," he said.
The overall uptrend is still intact, said Jatin Gedia, Technical Research Analyst at Sharekhan.
On Friday, the index opened above 18,600 level but soon fell in the negative territory. It eventually closed the day at 18,599, up 5.15 points or 0.03 per cent. Rupak De, Senior Technical at LKP Securities Nifty's movement was confined within a narrow range.
Chandan Taparia of Motilal Oswal Securities said the longer lower shadow on the Nifty candle indicated support based-buying on declines. He believes the index needs to hold above 18,580 to witness an up move towards 18,666 and 18,750. On the downside, he sees supports at 18,480 and 18,442 levels.
"On the daily chart, it formed a Doji candle, indicating indecision in the market. As a result, the overall trend is expected to remain sideways, with the index not showing a clear direction in its movement. In terms of levels, there is a support level at 18,500, which suggests a potential floor for the index, while a resistance level is identified at 18,665, indicating a barrier to further upward movement," he said.
In a note, Choice Broking said it is crucial for the Nifty to hold the levels of 18,400-18,450 levels. The resistance for the index is seen at 18,750-18,800, it said, adding that there is a strong support between 18,400 and 18,500 level.