Moneycontrol News
The Nifty recouped losses in the last 60 minutes of trade on Thursday after the Monetary Policy Committee (MPC), on expected lines, maintained a status quo stance on repo rate and avoided any tinkering with the Cash Reserve Ratio (CRR).
It was a volatile day for Nifty as it remained under pressure from the word go ahead of the MPC outcome, but bulls helped recover some losses as the index closed with marginal losses.
Bulls tried to push the index in green, but selling pressure at higher level pulled the index lower. However, it did close above its opening level which is a positive sign.
A hanging man is a bearish reversal candlestick pattern that is formed at the end of an uptrend. It is formed when the index witnessed significant downside at the open or in early trade but bulls managed to push the index back to the opening level.
In a perfect 'hanging man' pattern, there will be a small or no upper shadow. It would also have a long lower shadow with a small body. Formation of a hanging man candle in the uptrend indicates a possible reversal or a top.
However, investors should wait for confirmation. The uptrend still remains intact as long as Nifty holds above 9,150 levels on closing basis, suggest experts. Investors can carry forward their long positions with a stop loss below 9,156.
“The Nifty registered a ‘hanging man’ kind of formation on the daily charts before signing off the day, almost flat, when compared to the previous trading session. Lack of selling pressure post monetary policy accompanied by intraday recovery from day’s low can be considered as a positive sign for bulls in immediate trading session,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told moneycontrol.
“Bulls can make an attempt to get past 9,274 levels and register a new swing high and if they succeed then momentum may push indices further towards its logical targets placed around 9,350 levels,” he said. We recommend traders to remain cautiously optimistic and ride the positions with the stop below 9,156 levels on closing, said Mohammad.
The Nifty index opened with a slight gap on the downside, following muted global cues but managed to hold above its immediate support of 9,218. It closed with the marginal loss after the up move of last six consecutive sessions.
In Monday's price action, Nifty rose to 9,267.95, which made a small upper shadow and slipped nearly 50 points to hit intraday low of 9,218.85, which made a long lower shadow. The index closed 3.2 points lower at 9,261.95 which was above its opening level of 9,245.80.
“The Nifty formed a hanging man candle and also traded inside the trading range of the last session. For the momentum to continue, it has to surpass its immediate hurdle of 9,280 zone to witness a fresh up move towards 9,350 and 9380,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told moneycontrol.
“On the downside, immediate supports are seen at 9,218 and then towards 9,191. The index is continuously forming a hanging man or a dragon fly Doji on the daily chart which indicates that decline is being bought but follow-up is missing at higher levels,” he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
