Bulls bounced back on D-Street after being knocked out in the previous trading session. Formation of a bullish candle after a long legged doji pattern confirms the bullish bias on the D-Street, suggest experts.
Doji is a neutral chart pattern and often signals indecisiveness among bulls as well as bears, but a breakout above 9,700-9,709 is required.
Investors can initiate long positions once Nifty closes above 9,600-9,620 on a closing basis.
Rangebound movement witnessed in the last 7-10 days along with low volume activity suggests that bulls should tread with caution as bears could overpower D-Street anytime.
The structural uptrend still looks strong and intermittent corrections should be bought into, suggest experts.
A hanging man is usually formed at the end of an uptrend, but for now, there are no visible signs.
The Nifty opened the trade at 9,311.45 and closed at 9,314.05 which is almost similar to the opening level and that resulted in a cross or a plus sign on the charts. It rose to an intraday high of 9,338.70 and a low of 9,297.95 in trade on Monday.
A 'doji' is formed when the index opens and then closes approximately around the same level but remain volatile throughout the trading session which is indicated by its long shadow on either side. It appears like a cross or a plus sign.
Long-term investors should continue with their positions as long as 9,075 holds. Going forward, it is important for Nifty50 to break past 9,133 on a closing basis to witnessed buying momentum.
The market could experience some volatility ahead of March expiry on Thursday, but investors should hold onto long positions as long as 9,075 holds.
Bearish belt hold is a bearish reversal pattern in which the day opens at its high level, but then the price falls and closes near its low, not necessarily at the lows of the day.
There is another important pattern which traders should not overlook which is ‘inside bar’ or insider candle. Inside bar is a two-candlestick pattern in which the inside bar is smaller or within the range of prior bar.