Technical View: Nifty forms a ‘Hanging Man’ pattern; 10,500 crucial for bulls

It hit an intraday low of 10,544 which resulted in a long lower shadow. However, buying near crucial support helped narrow losses as the index closed just 13 points lower at 10585.20.

However, on the weekly basis, the S&P BSE Sensex rose 0.42 percent while the Nifty50 saw gains of 0.31 percent for the week ended November 9.

Most technical experts are of the view that it is critical for the index to close above 10620 levels for the bulls to regain control while on the downside crucial support for the index is placed at 10500 levels.

“It was looking like a week of consolidation for the bourses as Nifty50 remained in a narrow range of 142 points throughout the week as it signed off the last session with a Hanging Man kind of formation. This kind of narrow ranges may eventually lead to a spurt in either of the directions,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“However, on lower time frame charts as technical oscillators are slowly turning into sell mode, traders are advised to avoid long side bets unless Nifty50 registers a breakout on the upside with a strong close above 10,620 levels. Even then next critical resistance appears to be placed around 10,710 levels whereas on the downsides bears may pick up momentum on a strong close below 10,500 levels,” he said.

Mohammad further added that it is looking like directionless market traders for time being shall focus on stock specific opportunities in both the directions till the indices register a breakout in either of the sides.