Nifty formed bearish candle which resembles Hanging Man kind of pattern on the daily chart.
A Hanging Man is a bearish reversal candlestick pattern that is usually formed at the end of an uptrend or at the top. In a perfect 'Hanging Man' pattern, there will be a small upper shadow or no upper shadow at all, a small body and long lower shadow.
Nifty opened with moderate gains at 15773 and hit and intraday record high of 15778, but could not sustain those gains for long and remained consolidative for major part of the session. Nifty hit a day's low of 15680, before signing off session at 15740, down 11 points.
Nifty hit a fresh intraday record high but remained volatile throughout the session to close with moderate losses as traders could be looking for triggers for directional move going ahead. The consistent decline in daily Covid infections and easing restrictions by several states remained supportive for the market.
Today's trade clearly belonged to the midcap bulls as we saw both high-quality midcaps across sectors together with smallcaps rallying on sustained buying interest. Advance-declines too was encouraging today with buying seen across a wide array of stocks. Power stocks saw high activity with all three entities recording gains with high volumes.
Markets ended almost unchanged in a volatile trading session, in absence of any major trigger. The benchmark started on a flat note but selling pressure in the banking majors pushed the index lower in the first hour of the trade. As the day progressed, Nifty gradually inched higher, thanks to buying interest in IT, FMCG and healthcare majors and finally settled at 15740 level. The broader markets continued their outperformance and ended on a positive note in the range of 0.4-0.9%
In absence of any trigger, we may see further consolidation in the index thus it’s prudent to continue with a stock-specific trading approach. Needless to say, stability in the banking index is critical for further directional move in Nifty else the lackluster move would continue.
Despite new highs Nifty remained rangebound with 99 points move which resulted in a Hanging Man kind of indecisive formation. In fact a close observation of last 4 trading sessions reveals that Nifty has not made any meaningful gains on closing basis but remained in narrow ranges with almost indecisive formations.
It would be genuine to suspect that Nifty may be in distribution phase. And if it closes below 15600 then that can trigger a sharp downswing with initial targets placed in the zone of 15459/15375 level.
Contrary to this if bulls manage to push the index beyond 15778 levels then strength may get expand into the zone of 15850/15946 level.
Stiff hurdle for Nifty is still placed at 15800 and any decisive close above 15800 can open the quick door for the 16000 mark.
Nifty may be in the distribution phase and a close below 15600 can trigger a sharp downswing with initial targets placed in the zone of 15459/15375 level.
Traders to remain neutral on index but stock specific opportunities can be considered by Traders as advance decline ratio is still favouring bulls.
Sector Wise :- Metal index closed 1.38 percent lower. BSE Bankex ended 0.96 percent down and the finance index fell 0.68 percent.