Nifty snapped its six day winning streak and closed in the red, making a ‘Doji’ pattern on daily chart.
Nifty opened at 10054, rose to an intraday high of 10123. The bears took control and pushed the index below 10000 in intraday trade but buying at lower level helped the Nifty to close above 10000 level.
Nifty witnessed profit taking above 10100 level for the second day in a row. I feel that the consolidation is likely to continue following the run away rally in the last six sessions.
A Doji candle, after a bullish candle, indicates there indecisiveness among the bulls and the bears. Follow up buying will be seen once the Nifty closes above 10176, which was the intraday high of 3rd June 2020.
Nifty registered a Doji kind of indecisive formation as it traded in a narrow range of 179 points. In this process, it also marginally closed below its 100 Day EMA (10037).
If the bears fail to push the index decisively below the psychological support of 10k level on a closing basis in the next session, then a range bound move between 9950/10176 level can be expected in the next session.
A strong move beyond 10176 would bring back the bulls, with initial targets placed around 10350.
Traders to remain neutral on the long side and wait for some signs of strength, whereas intraday shorting could be considered below 9940 levels with a stop above 10000 on a closing basis.
Among sectors, Nifty Bank fell over 2 percent, while other indices ended in the green. Midcap and Smallcap indices ended flat.
- Someshwar, Technical analyst, Equidius Research