Tech view: Nifty50 forms Doji, signals indecisiveness in market

The Nifty50 on Wednesday settled almost at the same level as its opening level, thus forming a 'Doji' on the daily chart. The chart pattern suggests indecisiveness among the market participants. That said, the index restricted losses after a gap-down opening earlier in the day.“The index continued to consolidate within a broad trading range between 10,630 and 10,400 levels, representing a short-term sideways trend. The index is sustaining below its 20-day and 50-day SMAs, which signals a bearish bias for the near term. If the Nifty50 manages to surpass its immediate hurdle at 10,550, it may go higher towards 10,600 and 10,630 levels," said Rajesh Palviya, Head – Technical & Derivatives Analyst at Axis Securities. Levels around 10,430 remain an immediate support zone, Palviya said.The index fell 61.45 points, or 0.58 per cent, to close at 10,492. It was on the verge of making bullish crossover. However, the MACD often generates false signals in a trendless market.“Essentially, it looks like the index is still in a rangebound move from 10,630 to 10,300 level. Traders are advised to focus on stock-specific opportunities until a clear-cut breakout happens on the indices,” said Mazhar Mohammad at Chartviewindia.in.Mohammad said at the intraday low of 10,461, the index exactly retraced 50 per cent of its rally from the low point at 10,302 level.The index has to cross and hold above 10,550 to witness a bounce towards its major hurdle at 10,620, said Chandan Taparia of Motilal Oswal Securities. Holding below 10,500 could extend Nifty’s decline towards its next support at 10,430 and 10,400 levels, Taparia said.

from The Economic Times http://ift.tt/2sXJloo