Wednesday’s pattern indicated a follow-through weakness of the near-term top reversal pattern.
Mar 27, 2019, 05.51 PM IST
Nifty hovered near the band in the first half but bucked up in the second half, resulting in a steep fall.
NEW DELHI: Nifty50 on Wednesday fell in late trade to form a bearish candle on the daily chart, which resembled a ‘Dark Cloud Cover’. Analysts said traders have little conviction at highs. The market bias remains negative, as long as the index stays below the 11,550 level.
For the day, the index fell 38.20 points, or 0.33 per cent, to close at 11,445.
“Any failure to build on the gains of the gap-up opening suggests lack of conviction at higher level on the part of the bulls, who chose to book profit by making use of the initial strength. It is advisable for traders not to initiate fresh positions,” said Mazhar Mohammad of Chartviewindia.in.
Analysts said the index saw a gap-up opening near the upper limit of the hourly Bollinger Band. The index hovered near the band in the first half but bucked up in the second half, resulting in a steep fall.
“The hourly chart showed the index can take the form of a distribution triangle before embarking on a southward journey. This means the index can trade in the 11,430-11,530 range before heading downward. A short-term top is already in place at the recent high of 11,573,” said Gaurav Ratnaparkhi of Sharekhan.
Wednesday’s pattern indicated a follow-through weakness of the near-term top reversal pattern, said Nagaraj Shetti of HDFC Securities.
He felt the decline is unlikely to damage the uptrend structure of the market and expects weakness in the index to halt near the support range of 11,250-200.
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