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Tech View: Indecisive Doji on Nifty chart suggests market bias negative

The index may face immediate resistance in the 9,150-9,200 zone.

, ETMarkets.com|
Last Updated: May 22, 2020, 05.18 PM IST
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For now, Modi of SAMCO Securities has maintained a mildly bearish outlook as he feels any weakness in the global indices would only create difficulty for the bulls to hold the market.
NEW DELHI: Nifty50 snapped a three-day winning streak on Friday and formed an indecisive Doji on the daily chart. On weekly charts, the index formed a Hammer candle, indicating an intra-week recovery. The bias still remains negative, said analysts.

The index may face immediate resistance in the 9,150-9,200 zone and see support near the 8,900 level, they said.

"Currently, Nifty is hovering around its 20-day EMA and trendline breakdown level on the daily chart and thus, the 9,150 level would become a crucial hurdle. If Nifty manages to sustain above this level, we may see a bounce towards the 9,300-9,350 zone. On the flip side, support for the index is placed at 8,888 level," said Chandan Taparia of Motilal Oswal Securities.

For the day, the index closed at 9,039, down 67 points or 0.74 per cent.

"Support and resistance have now shifted to 8,700 and 9,200 levels, respectively. On the weekly chart, Nifty has formed a Hammer-shaped candlestick pattern, which will get confirmed only on a close above 9,200. Looking at the weakness in the banking space, which holds a substantial weight in Nifty50, it seems Nifty is headed lower,” said Jimeet Modi, Founder & CEO at SAMCO Securities.

Check out the candle formations in the latest trading sessions
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In case the bulls manage to defend the 8,968 level with a strong close above 9,100, they can make one more attempt to break out of the consolidation range at 9,160–8,800, said Mazhar Mohammad of Chartviewindia.in.

"Considering the indecisive formations and volatile nature of last two sessions, traders are advised to wait for signs of strength before creating long positions whereas intraday shorting can be considered below the 8,968 level," Mohammad said.

For now, Modi of SAMCO Securities has maintained a mildly bearish outlook as he feels any weakness in the global indices would only create difficulty for the bulls to hold the market.

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