Nifty hit a fresh record high but couldn’t hold on to the gains in a volatile session, forming a Hanging Man pattern on the daily chart.
Nifty remained in the consolidation mode for the most part of the day. Nifty formed a bearish candle on the daily chart as it closed lower than its opening level.
A Hanging Man is a bearish reversal pattern 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 a long lower shadow.
Nifty opened higher at 15958 and remained volatile throughout the session. It touched an intraday record high of 15962 and low of 15882 before settling at 15923.
Nifty gained 1.5 percent during the week and formed a bullish candle on the weekly chart. Nifty needs to sustain above 15900 to move towards 16000.
Market traded lacklustre and ended almost unchanged, taking a breather after the recent up move. Benchmark opened marginally in the green however profit booking in heavyweights from the banking and IT pack dragged the indices lower. However, buying in pharma, realty and metal majors helped the index to pare the intraday losses and end flat. Eventually, Nifty closed at 15923 level. Meanwhile, Outperformance continued from the broader indices which kept the traders busy.
It appears to be the day of consolidation on the bourses as Nifty remained in a narrow range of 80 points by depicting a Hanging Man kind of candle whereas a small bullish candle with 318 point range was registered on the weekly chart.
Though the price chart is bullish biased, Technical oscillator and indicator setup has not yet improved in favour of the bull, Index Traders should remain cautiously optimistic by maintaining a stop below 15773 level.
Despite lacklustre move, Bulls seem to have an advantage as the Nifty managed to sustain above 15900. The current breakout would be deemed to have failed if the Nifty closes below 15773, and in that scenario, the index may slip into a consolidation phase with a negative bias.
Traders should remain cautiously optimistic by maintaining a stop below 15773 level.
Sector Wise :- Nifty Pharma, realty and metal indices rose over a percent each while Nifty IT fell over a percent.