Home Market Tech view: Nifty forms Spinning Top, highs and lows shift higher

Tech view: Nifty forms Spinning Top, highs and lows shift higher


NEW DELHI: The Nifty50 settled flat on Wednesday despite a rout in other Asian markets. The index formed a Spinning Top candle on the daily chart, suggesting indecisiveness among traders. That said, the index continued to form higher highs and higher lows, and as long as it defends the 10,880 level, the trend is likely to remain positive, experts said.

A small-bodied negative candle was formed at the swing high of 10,976, which is indicating a breather-type pattern at the highs or it could be a temporary halt in the upside momentum, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

This pattern, Shetti said, could open up further consolidation or minor downward correction in Nifty50. On any minor decline from here on, Nifty could find support in the 10,900-880 range over the next 1-2 sessions, he said.

For the day, the index rose 1.05 points, or 0.01 per cent, to close at 10,948. It formed a 'Spinning Top' candle on a daily chart, which indicates that the bears are trying to defend the psychologically important 11,000 mark, said Chandan Taparia of Motilal Oswal Securities.

“Now as long as it holds above 10,880, Nifty could extend its gains and move towards 11,000 and also the life-time high of 11,171. Downside supports are seen at 10,835 and 10,770 levels," he said.

Mazhar Mohammad of Chartviewindia.in believes Wednesday's pause was healthy, as the index had already advanced in seven of past nine sessions.

Traders are advised not to read too much into this pause. The trend will not favour the bears unless the index closes below 10,860. “Any dip shall be considered as an opportunity to go long. Strength in Nifty shall re-emerge once the bulls manage a close above 10,976 with an initial target placed around 11,100,” Mohammad said.

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