A typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of intraday movement on either side.
The Nifty50 which opened with a gap down managed to recoup a majority of its losses and closed flat with slight negative bias on Friday. It made a bullish candle on the daily charts on an intraday basis and a ‘Long Legged Doji’ kind of pattern on the weekly charts.
A typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of intraday movement on either side.
The Nifty50 opened the week at 10,765.95 on Monday and closed at 10,767 on Friday. But, it hit a low of 10,633.15 on 5 June and a high of 10,818 on Thursday.
For Friday, Nifty index opened negative but managed to hold on to its immediate support of 10,700 – 10,720 zones and recovered towards its crucial hurdle of 10,770-10,780 zones.
Technical experts advise investors to remain cautious as bulls failed to reclaim crucial resistance levels even after strong rally seen in two back-to-back trading sessions. It is crucial for bulls to reclaim 10,818 levels which was the intraday high of Thursday for the momentum to continue.
On the weekly charts, it looks that it is slowly inching up as it registered a third consecutive positive close before signing off the week with a ‘Long Legged Doji’ kind of candlestick formation suggesting indecisive nature of bulls.
Hence, it is critical for Nifty50 to register a fresh breakout above recent highs of 10,818 levels so that bulls can confidently march ahead else they continue to remain vulnerable to a counterattack by the bears at any time.
Mohammad further added that Thursday’s gap-up opening in the zone of 10,722 – 10,698 appears to be in a critical support and a breach of which could enhance selling pressure, but for now, traders are advised to remain cautiously optimistic till a directional move unfolds going forward.
India VIX fell down by 0.65 percent at 12.69 levels. On the options front, maximum Put OI is placed at 10,600 followed by 10,500 strikes while maximum Call OI is placed at 11,000 followed by 10,800 strikes.
Put writing was seen at 10,600 and 10,700 strikes while Call writing was seen at 11,000 and then towards 10,700 strikes. “Options data suggests a broader trading range in between 10650 to 10850 zones for next coming sessions.
The Nifty closed flattish by forming a small bullish candle on the daily scale while on the weekly basis it formed a high wave long legged Doji Candle. The price set up suggests that decline is being bought while follow up is missing at a higher level to hold beyond 10,770 zones on closing basis.
The index needs to hold above 10,770 zones to extend its positive movement towards 10,888 and then towards 10,929 while on the downside supports are seen at 10,720 and then towards 10,660 levels.
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