Individually, L&T and HDFC were the biggest contributors to the gains in Nifty50 and Sensex30.
NEW DELHI: Nifty50 formed a bullish Doji kind of candle on Monday, indicating indecisiveness among investors. The trading range was narrower than the previous session, which is likely a hint of a slowdown in the upward journey as well as profit taking.
Nifty50 advanced 119 points, or 0.80 per cent, to 14,942 level, amid buying in metals, banking and pharma stocks. The index continued its winning streak and saw positive close for a fourth session on May 10.
“Nifty’s trading range for the day remained extremely narrow inside 70 points, which was less than the previous session’s 93 points, which hinted at waning momentum in the upward journey. These back-to-back narrow sessions can result in sudden trend reversal, as is evident from the historical price behaviour,” said Mazhar Mohammad, Chief Strategist, Chartviewindia.
“Traders are advised to avoid Nifty trades for the time being, considering the narrow trading range, and shift focus to stock-specific opportunities,” he said.
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Mohammad said unless Nifty registers a strong close above 15,045 level with a large bullish candle, one cannot expect a sustainable upswing. Meanwhile, Nifty needs to sustain above Monday’s minor bullish gap area present between 14,892 and 14,863 levels to retain the bullish bias, as a close below 14,860 level can be considered as the initial sign of weakness.
Earlier in the day, Nifty opened the session with a good gap and hit a high of 14,951 and low of 14,912.
“A strong hurdle still exists at 15,050 level. If Nifty manages to sustain above it for a day or close above it, only then we may see further upside. Otherwise, some profit booking is possible and support can shift to the 14,900-14,850 zone. If Nifty holds above these levels, the momentum can remain good,” said Rohit Singre, Senior Technical Analyst at LKP Securities.
Individually, L&T and HDFC were the biggest contributors to the gains in Nifty50 and Sensex30. In the broader market, PSU stocks turned winners. From among the defensives, pharma stocks did well.
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Not everyone thinks narrow candles are bad for the market. “The market is daily moving upward cautiously and forming a series of indecisive candles. Whenever the market has formed a series of indecisive candles, Nifty has actually moved upward,” said Shrikant Chouhan, EVP, Equity Technical Research, Kotak Securities.
He said Bank Nifty closed above the psychological barrier at 33,000 level, which might lift the index to 34,000 level with a major hurdle at 33,650 level.
