Tech view: Nifty forms small bullish candle, consolidation to continue

Wednesday’s small candlestick pattern indicated indecisiveness among investors. NEW DELHI: The Nifty50 fell in line with other global markets on Wednesday, but managed to close above the psychological mark of 9,900.

The index traded in a narrow range and, like Tuesday’s session, moved within Monday’s bearish candle range between 9,988 and 9,861 levels. At close, the index ended above its opening level, thus, forming a small bullish candle on the daily chart.

Analysts expect the ongoing consolidation in the index to continue over the next few sessions before it sees a decisive breakout.

The index opened a few basis points below the 9,900 mark and hit a high and low of 9,931 and 9,882 levels, before closing the day at 9,916, down 36 points, or 0.36 per cent.

“The price range of last two sessions was contained with the 9,988-9,861 range seen during Monday’s bearish trade. In the near term, expect the index to move swiftly towards a breakout. A breach of the 9,861 level shall accelerate selling pressure towards the 9,700 level, while breaching the 9,988 level may push the index towards its critical resistance point at 10,040,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.

Mohammad advised traders to seek stock-specific opportunities by placing a market stop below the 9,861 mark.

Mustafa Nadeem, CEO at Epic Research, said Wednesday’s small candlestick pattern indicated indecisiveness among investors.

The bulls have very strong hold in the current structure between 9,870 and 9,850 levels, while the bears have a strong hold at 9,970 level, the expert said.

“It is a matter of few days before we see a breakout of the above-mentioned range in a decisive way,” he said.

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