Tech View: Nifty’s Doji candle suggests pause in momentum

NEW DELHI: Nifty50 on Monday fell shy of closing above the 15,200 level despite breaching it at the opening bell, thus forming an indecisive Doji candle on the daily chart. A Doji candle suggests investor indecisiveness at a higher level.

Analysts said as long as the index trades above the 15,100-15,000 zone, the momentum remains positive. At most, the index can remain rangebound in the coming days, they said, while suggesting 15,300 as the immediate resistance level for the NSE barometer.

A ‘Doji’ preceded by a long green candle suggests that there could be a pause in the ongoing rally for a day or two, before the index resumes uptrend, said independent analyst Manish Shah.

“As we go into the last few days of May expiry, Nifty50 may see a rangebound action in the 15,310-15,000 range. I do not see Nifty50 trading above 15,430 before the end of May expiry,” Shah said.

For the day, the index closed at 15,197.70, up 22.40 points or 0.15 per cent.

“There are no reversal signs and thus, the breakout seen in the indices during last week remains valid. Traders are advised to look for buying opportunities in intraday dips and trade with a positive bias. The immediate support for the Nifty is placed around 15,130 and 15,075, whereas a resistance is seen around 15,340 level,” said Ruchit Jain of Angel Broking.

Chandan Taparia of Motilal Oswal Securities said that the index has been forming higher high-higher lows from the last two sessions. “It needs to hold above 15,150 to witness an up move towards 15,300 and then a lifetime high of 15,431 mark,” he said, while suggesting downside support at 15,000 and 14,900 levels.

Rohit Singre of LKP Securities also sees good support for the index in the 15,100-15,000 range. He believes that any dip around the said range will be a buying opportunity. Traders can keep the overall stop loss below 15,000, he said.

“Immediate resistance is placed at 15,250-15,330 levels. Around these levels, we may see some profit booking,” Singre said.

Nirav Chheda of Nirmal Bang Securities, meanwhile, believes that levels around 15,500 are quite possible by the F&O expiry, given the recent good breakout. This analyst advised traders to refrain from creating short positions and rather look for creating long positions, as fear gauge India VIX has come down and many F&O traders have already booked positions, which he says are positive signs.

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