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Last Updated : Apr 06, 2018 06:57 PM IST | Source: Moneycontrol.com

Technical View: Nifty forms ‘Doji’ candle; closes week with 2% gains

A 'Doji' is formed when the index opens and then closes approximately around the same level but remain volatile throughout the day which is indicated by its long shadow on either side. It appears like a cross or a plus sign.

Kshitij Anand @kshanand

The Nifty which started on a muted note managed to recoup losses and closed with gains of just six points but above its crucial psychological support level of 10300 on Friday. It made a Doji type of pattern on the daily chart while a bullish candle for the weekly charts for the week ended 6 April.

The index which made a Bullish Marubozu candle on the daily charts on Thursday consolidated in a narrow range on Friday and made an indecisive candlestick pattern on the daily charts.

A 'Doji' is formed when the index opens and then closes approximately around the same level but remain volatile throughout the day which is indicated by its long shadow on either side. It appears like a cross or a plus sign.

Close

The Nifty index opened at 10,322 and rose to an intraday high of 10,350 which is close to its 50-DEMA. It slipped to an intraday low of 10,290 before closing the day 6 points higher at 10331.

Analyst advises investors to remain long on the index with a stop loss below 10227 levels which is also its crucial support. On the higher side, Nifty is likely to face stiff resistance around 10460 levels.

“It was a day of consolidation on the bourses as Nifty witnessed a listless trading session with an extremely range bound move of 60 points before signing off the day with a Doji kind of indecisive formation,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“However, on the weekly charts, a decent bullish candle was registered for the second consecutive week suggesting that momentum is slowly shifting in favour of bulls and once Nifty registers a firm close above 10350, where 50-days EMA average levels are placed, then it can act as some sort of confirmation for bigger moves to be achieved in the near term may be towards 10650 kind of levels,” he said.

Mohammad further added that any dip shall be used only as an opportunity to go long for an initial target of 10460 and thereafter a bigger swing towards 10650 can’t be ruled out. On the downsides, the level of 10227 shall be assumed as the critical support below which bullish momentum shall fade away.

India VIX remain flattish at 14.74. However, VIX needs to hold below 13.50-13 zones for getting short-term stability in the market.

On the options front, maximum Put OI stood at 10000 followed by 10200 strikes while maximum Call OI was seen at 10500 followed by 11000 strikes.

Fresh Put writing at 10300 and 10000 while Call writing is seen at 10500 then 10450 strikes. Option data suggests a trading range in between 10200 to 10450 zones.

“The Nifty index opened flattish and remained range bound for the most part of the trading session. It has been making higher highs- higher lows from last three trading sessions. It formed a Doji Candle on the daily scale which means follow up buying is missing at higher levels,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

“Now, till it holds above 10276 zones, it could extend its move towards 10440 while on the downside support are seen at 10222 then 10180 levels,” he said.

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First Published on Apr 6, 2018 06:56 pm
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