NEW DELHI: Nifty50 found the psychological mark of 12,000 level too difficult to sustain on Tuesday, as it retreated and eventually ended up forming a ‘Doji’ on the daily chart for the third straight day. This structure on the technical chart signals indecisiveness.
That said, the index has formed higher highs and lows for the second straight session, suggesting that the support level has shifted higher. Going forward, the 11,760-12,040 range remains crucial, a breakout of which can give a clear direction to the market.
For the day, Nifty rose 42.90 points, or 0.36 per cent, to 11,965.
“Declines are being bought into, as resistance points remain intact at the upper band of the trading zone. The index needs to hold above 11,888 to witness an upward move towards 12,041 and 12,100 levels. On the downside, supports are seen at 11,888 and 11,761,” said Chandan Taparia of Motilal Oswal Securities.
Mazhar Mohammad of Chartviewindia.in said the price action seen in last three sessions looks like an upward corrective reaction to the fall from the all-time high of 12,103 registered on June 3 and on the back of a negative advance-decline ratio, which is a cause of concern.
“The bulls need a strong close above 12,039 level to be back in the game. Unless such a breakout occurs, the market would remain vulnerable to selloff,” he said.
During the session, Nifty traded within a broad ‘non-trending’ zone between 11,775 and 12,100 levels, said Arun Kumar of Reliance Securities.
“The index has to close above 12,040 to regain its bullish momentum. However, a negative close below 11,830 would activate bearish signals. Short-term traders need to be very alert during this phase,” Kumar said.