NEW DELHI: NSE Nifty snapped a two-day winning run on Thursday and ended up forming a bearish candle on the daily chart. This candle following an indecisive ‘Doji’ in the previous session suggests the recent rally may be coming to an end, said experts.
Before closing 30.70 points, or 0.26 per cent, down at 11,968.40, the 50-share index moved between a high and a low of 12,028.20 and 11,956.90, respectively. Concerns over delay in US-China trade deal and Federal Reserve minutes fuelled negativity in global markets.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia said, “Inability of Nifty to sustain above 12,000 for quite some time may be hinting at an impending weakness, which will be confirmed on a close below 11,896 level. Below this, selling will get accentuated further with initial targets placed at around 11,802.”
On the other hand, a strong close above 12,038 will negate the current bearish view by extending the strength towards 12,103, Mazhar added.
Bank Nifty on the day witnessed a flattish session as the market witnessed a phase of consolidation. The index closed 0.01 per cent down at 31,349.95.
“It’s not at all unexpected to witness some retracement near all-time highs. The broader structure continues to remain positive and the uptrend is intact. Near term corrections towards the support zone should be utilised to build long positions,” said Manav Chopra, Head Research – Equity, Indiabulls Ventures.
Overall, Thursday’s session was completely dominated by weekly options expiry. The 12,000 strike continued to hold maximum open interest (OI) and this saw Nifty not moving past this level.
“In a session that was spent in a defined range, the Nifty ended up forming a small engulfing bearish candle following a Doji that emerged on Wednesday. This has once again reinforced 12,000-12,050 zone as stiff and important resistance,” said Milan Vaishnav, Consultant Technical Analyst at Gemstone Equity Research & Advisory.
Source: Economic Times