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Tech view: Nifty forms bearish candle, likely to consolidate with positive bias

Nifty needs to surpass 11,111-11,141 range, else it may get stuck in a broader trading range.

, ETMarkets.com|
Updated: Sep 12, 2019, 10.01 PM IST
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BCCL
Nifty---BCCL-1200
NEW DELHI: Nifty faced stiff resistance at higher levels on Thursday and eventually settled below the psychologically important 11,000 mark. In the process, the index formed a bearish candle on the daily chart.

The index also formed a probable inverse Head & Shoulder pattern, whose neckline stood at 11,150 level, said Manav Chopra of Indiabulls Venture.

“Nifty has been witnessing consolidation since past few sessions, but market breadth remains positive. It should head higher going forward. There will be supports around 10,850 and 10,800 level, which is likely to act as a cushion on the lower side in case of any decline,” the expert said.

For the day, the index closed 54.65 points, or 0.50 per cent, down at 10,981.

“We observe the formation of relatively smaller candles in the last couple of sessions, compared with the previous decline from the mid-August resistance. While the trend is weak, there is a possibility of an upside bounce from lower levels,” said Nagaraj Shetti of HDFC Securities.

Nifty negated the formation of higher lows of last four days. The index needs to surpass its multiple hurdles in the 11,111-11,141 range, else it may get stuck in a broader trading range, said Chandan Taparia of Motilal Oswal Securities.

“The index needs to hold above the 11,000-11,050 range to witness a bounce towards 11,111 and 11,141 levels while a failure to do so can make it drift below 10,950 and even take it to 10,880-10,850 zone,” Taparia said.

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