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Tech View: Back-to-back Dojis suggest bulls are tired and need a break

NEW DELHI: Nifty50 on Friday remained in a tight range of 75 points, despite hitting a record high level. While the formation of higher highs and lows continued, so was the formation of another indecisive Doji on the daily chart. On the weekly scale, a small bearish candle was formed.

Analysts said the bulls looked tired and some profit booking cannot be ruled out early next week. They expect 15,250 and 15,100 levels to offer support to the index and advised a buy on dips strategy.

“Albeit celebrations in the bull camp, the index ended up with an indecisive Doji formation. Moreover, Friday’s rally was seen on the back of

alone, which added 90 points to Nifty gains. The market breadth was in fact decisively skewed in favour of the bears, suggesting that the broader market was cautious and made use of the rally to book profits. To retain positive bias, Nifty50 needs to sustain above Friday’s minor bullish gap zone of 15,394-384 levels,” said Mazhar Mohammad of Chartviewindia.in.

Check out the candlestick formations in the latest trading sessions

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Chandan Taparia of Motilal Oswal Securities said that the index supports exist at 15,250 and 15,150 levels. This analyst believes that a hold above the 15,300 level is a must for any upside towards 15,500 and 15,650 levels.

For the day, the index closed at 15,435.65, up 97.80 points or 0.64 per cent. This was the highest close for the index ever. The intraday high for the index at 15,469.65 was its all-time high.

“Nifty50 index crossed lifetime highs and closed the week on a positive note. However, this week’s move was slow and lacked strength. It is likely the benchmark index could face resistance at higher levels. The bulls are getting tired as the index is trading much higher than its mean levels. Hence, a brief corrective dip cannot be ruled out. The level of 15,160 is the immediate support level for Nifty50,” said Nirali Shah, Head of Equity Research, Samco Securities.

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Shrikant Chouhan of Kotak Securities said that 15,250 and 15,100 levels are big pillars for the index and as long as the index stays above that, he sees 16,000-16,200 coming. “The strategy should be to buy on dips,” he said.

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