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Tech View: Nifty50 forms Doji candle, likely to see sideways movement ahead

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NEW DELHI: Nifty50 on Friday formed a Doji candle on the daily chart, suggesting indecisiveness among traders. On the weekly scale, the index formed an indecisive candle, even as it continued to form higher highs and lows for the fifth straight week. Analysts said the index may move sideways next week. They see the 15,840 level as immediate resistance for Nifty50, and expect the 17,750-700 range to offer some support to the index.

Mazhar Mohammad of Chartviewindia.in saidthe index traded in a narrow range of 266 points during the week, hinting at a weakening of momentum.

“Moreover, certain technical oscillators on the weekly charts appear to be overheated, with the daily RSI registering a possible negative divergence, as it failed to get past the previous top, unlike the price chart. We see sideways consolidation next week with a negative bias,” Mohammad said.

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For the day, Nifty closed at 15,799, up 61.60 points or 0.39 per cent.

“A Doji candle pattern represents indecision in the market. On an immediate basis, the index has support near the 15,750-15,700 zone and any breach below this range can drag Nifty50 towards the 15,600-15,500 region. The 15,840 level would act as the immediate hurdle. If it is breached and sustained, an extension of gains towards the 16,000 mark will be possible,” said Rohit Singre of

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Mohammad said a fall below the 15,749 level may drag Nifty50 towards the 15,566 level. He advised traders to remain neutral.

“For the next week,” said Shrikant Chouhan of Kotak Securities, “one needs to change the strategy of buying on minor supports to buying only on large supports.”

“Try buying the index in the 15,550-15,450 range. Our advice would be to take profit or reduce long positions between 15,950 and 16,050 levels,” Chouhan said.

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