NEW DELHI: The Nifty50 on Monday could not capitalise on the gap-up start and ended up forming a small bearish candle on the daily chart that resembled an indecisive ‘Spinning Top’. Analysts said lack of strength was visible in the market, bu t the positive bias may continue as long as the index stays above the 10,741 level.
During the session, the index came closer to its 50-day exponential moving average (EMA) but traders respected the level, which lay at 10,657 at closing bell.
“The opening upside gap was filled completely during the intraday dip. This signalled lack of strength on the upside bounce. We observe consistent lower top formation on the smaller degree frames and Monday’s upward move could be in the process of forming yet another lower high (compared with the recent swing high of 10,923),” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The index eventually negated the formation of lower highs and lower lows of last three sessions and closed near to its 50-day EMA.
Dips got bought into, but followup buying was missing at higher levels, said Chandan Taparia of Motilal Oswal Securities. “Nifty has to hold above 10,750-10,777 for any upside towards 10,850. Downside supports exist at 10,650 and 10,600 levels,” he said.
The index rose 49.25 points, or 0.46 per cent, to close at 10,776.