The Nifty50 snapped its six-day winning streak on June 4 and closed in the red, making a ‘Doji’ pattern on daily charts.
The index witnessed profit-taking above 10,100 levels for the second day in a row. Experts feel that the consolidation is likely to continue following the run-away rally in the last six sessions.
A Doji candle, after a bullish candle, indicates there indecisiveness among the bulls and the bears. Follow-up buying will be seen once the Nifty closes above 10,176, which was the intraday high of June 3, experts say.
The Nifty50, which opened at 10,054, rose to an intraday high of 10,123. The bears took control and pushed the index below 10,000 in intraday trade but buying at lower levels helped the Nifty to close above 10,000. The index closed 32 points lower at 10,029.
“The Nifty50 registered a Doji-kind of indecisive formation as it traded in a narrow range of 179 points. In this process, it also marginally closed below its 100-Day EMA (10,037),” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
“If the bears fail to push the index decisively below the psychological support of 10k levels on a closing basis in the next session, then a range-bound move between 9,950–10,176 levels can be expected in the next session,” he said.
Mohammad added that a close below 10k would strengthen the bear sentiment in the near term and could drag down the Nifty towards 9,700.
A strong move beyond 10,176 would bring back the bulls, with initial targets placed around 10,350.
For the time, Mohammad advised traders to remain neutral on the long side and wait for some signs of strength, whereas intraday shorting could be considered below 9,940 levels with a stop above 10,000 on a closing basis.Disclaimer
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