Nifty Shapes Spinning Top on Weekly Charts

New Delhi: On Friday, Nifty 50 stayed in line with the seen trend since the last four trading sessions, featuring traders’ indecisiveness throughout the week. The index closed at 10,768 points, down by 0.42 per cent or 45.40 points.

The analysts said it is very clear from the formation of the “Doji” candle on the daily chart and the formation of “Spinning Top” on weekly trading charts that these signals do not support bulls.

Nifty50 forms spinning top patterns on the weekly charts as traders are afraid of new heights. Most traders trade on sell at a high price strategy.

What are Experts View?

Gaurav Ratnaparkhi of Sharekhan said the formation of “Doji Candle”, especially after an “Inside Bar“, clearly indicates the market losing its steam on the upside.

“The index seems to be creating a 200-DMA below distribution with the support coming from 10,676 level working as key support and 10,850 level working as a resistance. The lower range end is a low swing and needs to be continuously monitored,” Ratnaparkhi added.

“The Nifty 50 has taken a bullish sequence and developed into “Rising Wedge” since its low of 9,540 level, which is out of momentum now,” Tradebulls Securities, Sacchitanand Uttekar said.

What Are Technical Analysts Thoughts?

Uttekar advisor of refraining from building fresh longs also mentioned the index has now infiltrated its final stage ahead of a breakdown. Nifty 50 has been holding above its 5-day EMA indicator daily while RSI indicates a clear negative divergence, cutting average close to overbought zone.

“Nifty50 faced strong resistance at 200-DMA at 10,893 points during the week,” Aditya Agarwala of YES Securities said.

Agarwala also said a continuous trade beyond consolidation channel upper end at 10,850 points would pull it towards 200-DMA at 10,893 and 11,035 points. Profit booking may set in – if bears drag the index below 10,700. In such conditions, the market will drag further down to 10,545 points.”