Tech view: Nifty forms long-legged Doji, may be nearing reversal point
NEW DELHI: The Nifty50 on Monday kissed the 10,600 mark, but failed to hold it and close above the psychological level. The index formed a 'Long-legged Doji' candle on the daily chart, suggesting struggle between the bulls and the bears to gain upper hand ahead of April series F&O expiry.
A long-legged Doji candlestick pattern indicates uncertainty ahead of F&O expiry, said Rajesh Palviya, Head Technical & Derivatives Analyst at Axis Securities.
“For last five consecutive sessions, the index has been consolidating in the 10,600-10,500 range. A breakout on either side of this range will indicate further direction. At Fridays high of 10,638, the index retested its February 2018 resistance zone between 10,630 and 10,640 levels. The upper limit of this band remains a crucial resistance for now,” Palviya said.
The index closed the day at 10,584, up 20.65 points, or 0.20 per cent. The index hit an intraday high of 10,638 and low of 10,514 during the session.
Mazhar Mohammad of Chartviewindia.in said Mondays wild swing suggested that demand and supply forces have reached an equilibrium stage and the market is approaching a potential reversal point.
“Traders need to remain cautious and look for clearance of the 10,630 level on a closing basis, which shall lead the index towards its next logical target of 10,900. A close below 10,500 shall enhance selling pressure on the market, thereby ushering in a short-term downtrend,” the expert said.
Chandan Taparia of Motilal Oswal believes as long as the Nifty50 holds above the 10,480-10,500 zone, it has the potential to move towards 10,630 and 10,700 levels.