The small body of negative candle after the gap up opening signalled reluctance of the market to conquer further highs after the sharp positive opening, said Nagaraj Shetti, Technical Research Analyst,HDFC Securities. He believes the market could see consolidation or minor downward correction in the short term.
NEW DELHI: The Nifty50 on Wednesday climbed for the fourth straight session and, in the process, topped the 16,500 level on a closing basis. That said, the index ended up forming an indecisive bearish candle on the daily chart after a gap-up opening, suggesting investors were indecisive at highs. Analysts see selling at highs. They believe the index could face resistance around the 16,650 level.
The small body of negative candle after the gap up opening signalled reluctance of the market to conquer further highs after the sharp positive opening, said Nagaraj Shetti, Technical Research Analyst,
Securities. He believes the market could see consolidation or minor downward correction in the short term.
For the day, the index closed at 16,520.85, up 180.30 points or 1.1 per cent.
Nifty50 saw an extended upmove in the last couple of days, contrary to the prevalent belief, said Independent analyst Manish Shah.
“It is nearing resistance at 16,650-16,800, where one could see a bout of profit-taking. The range of Nifty50 in the last couple of months, in addition to the far end of previous swings, is acting as a barrier to rising prices. Over the next couple of days, there could be some topping-out pattern. Expect Nifty50 to remain elevated for the next couple of days. It is time to be cautious in the market,” Shah said.
Mazhar Mohammad of Chartviewindia.in said that the index moved past the 200-day EMA with a gap up opening, but the intraday trading range remained in an extremely narrow range.
“Some momentum oscillators on the lower time frame charts have reached the overbought zone. This can be the right area for bears to strike back. Therefore, in the next trading session, if the index slips below 16,490, then the index can attempt to eventually bridge the day’s bullish gap present between 16,490 and 16359 levels,” Mohammad said.
Nifty Bank opened positive and moved in a consolidative manner for the first half of the session. The second half witnessed weakness from highs as the index lost all its intraday gains and drifted from 35,900 to 35,150 levels. Its index formed an Inside Bar, and a bearish candle on the daily scale, said Chandan
“Till the index holds below 35,500, weakness could be seen towards 35,000 and 34,750 levels. Resistances are placed at 35,750 and 36,000 zone,” Taparia said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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