Skip to main content

Nifty forms Hanging Man pattern, 12,770 crucial for further upside

Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral and wait for some signs of weakness before shorting.

The Nifty50 opened at record high levels and faced volatility during the day, but the rebound in the last couple of hours of trade helped the index to end at fresh record closing high on November 11.

Bulls continued their support for the eighth consecutive session and as a result, the index formed bullish candle which resembles a Hanging Man kind of pattern on the daily charts.

A Hanging Man is a bearish reversal candlestick pattern which is usually formed at the end of an uptrend or at the top (around 8.5 percent rally in 7-trading sessions). In a perfect 'Hanging Man' pattern either there will be a small upper shadow or no upper shadow at all, a small body and long lower shadow.

The consistent flow of FII money and buying in banking & financials, auto, FMCG, metals and pharma stocks pushed the market higher.



Experts feel the 12,770 would be crucial level to watch out for, if the index strongly surpasses the same then 12,850 can be possible on the Nifty in coming days.

As of now, except overbought readings on momentum oscillators, no other weak signs are visible on the charts, said Mazhar Mohammad of Chartviewindia.in. Hence, in the next trading session if bulls manage to push indices beyond 12,770 levels then the strength in Nifty shall get extended further towards 12,850 levels, he feels.

Therefore, he advised traders to remain neutral and wait for some signs of weakness before shorting.

The Nifty50 opened higher at 12,680.60 and witnessed some volatility during the day. The index touched an intraday high of 12,769.75 and low of 12,571.10, before signing off the session at 12,749.20, up 118.10 points.

"Albeit Nifty50 posted a strong show with smart recovery from intraday low of 12,572 levels, it registered a Hanging Man kind of formation on the candlestick charts which is usually found around potential turning points as trend nears exhaustion," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.

Nevertheless, confirmation of weakness will occur if Nifty trades below 12,571 in next session which shall potentially trigger a short term downswing, he feels.

Moreover, based on long term trend analysis Nifty has critical resistance in the zone of 12750 – 12,800 levels, he said, adding this zone can be a potential turning point for the indices going forward.

India VIX increased further, up by 2.10 percent from 21.57 to 22.03 levels today.

Option data indicated that a wider trading range for the Nifty could be 12,400 to 13,000 levels.

On option front, maximum Put open interest was seen at 12,000 followed by 11,000 strike while maximum Call open interest was seen at 13,000 followed by 12,500 strike. Call writing was seen in 12,700 and 13,000 strike while Put writing was seen at 12,700 then 12,600 strike.

Bank Nifty opened positive at 28,713.15 and continued its upward movement to hit a day's high of 29,030.90. It managed to close the session with gains of 239 points at 28,845 in spite of consolidation in some banking stocks. It formed a small bodied candle on daily scale but has been making higher highs - higher lows from last eight trading sessions.

"Bank Nifty has to continue to hold above 28,200 to witness an upmove towards 29,250-29,500 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Positive setup was seen in Hindalco, Tata Steel, Apollo Hospitals, IGL, SAIL, Jubilant Foodworks, Eicher Motors, Axis Bank, Tata Motors, ITC, UltraTech Cement, Escorts, JSW Steel and MGL while weakness was seen in Reliance Industries, Bata India, Muthoot Finance and Dabur, he added.

Comments

Post a Comment

Popular posts from this blog

Reliance Jio Q3 results: Profit grows to Rs 3,489 crore; ARPU rises to Rs 151

  The average revenue per user (ARPU) during the quarter came at Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the September quarter. Reliance Jio, the telecommunications arm of Jio Platforms, on January 22 posted a net profit of Rs 3,489 crore for the quarter ended December 31, 2020. The profit was higher than the street expectations as analysts in a CNBC-TV18 poll had estimated the number at Rs 3,200 crore. Jio's net profit grew 15.5 percent QoQ as in the September quarter of FY21, its profit was Rs 3,020 crore. The average revenue per user (ARPU) during the quarter came at Rs 151 per subscriber per month as against Rs 145 per subscriber per month in the September quarter. A CNBC-TV18 poll had estimated ARPU at Rs 148.2. Revenue, including access revenues for the quarter, was Rs 22,858 crore ($3.1 billion), up 5.3 percent QoQ. A CNBC-TV18 poll had estimated revenue to the tune of Rs 18,165 crore. EBITDA for the quarter stood at Rs 8,483 crore ...
Post a Comment
Read more

Ashoka Buildcon share price up 4% on bagging 2 NHAI projects

The share touched its 52-week high Rs 127.90 and 52-week low Rs 37.00 on 23 September, 2019 and 03 April, 2020, respectively. Ashoka Buildcon share price added over 4 percent in early trade on September 8 after the company emerged as the lowest bidder (L-1) for the two NHAI projects. The aggregate quoted value of the projects is Rs 1,390 crore. The company had submitted bids to National Highway Authority of India (NHAI) for the project of four laning of Arra h to Pararia section of NH-319(Old NH-30) in the State of Bihar under Bharatmala pariyojana Phase -1 on EPC Mode (Package-I) and Four laning of Pararia to Mohania section of NH-319(Old NH-30) in Bihar under Bharatmala Pariyojana Phase-I on EPC Mode (Package II). At 09:23 hrs Ashoka Buildcon was quoting at Rs 70.60, up Rs 2.40, or 3.52 percent on the BSE. The share touched its 52-week high Rs 127.90 and 52-week low Rs 37.00 on 23 September, 2019 and 03 April, 2020, respectively. Currently, it is trading 44.8 percen...
Post a Comment
Read more

Futures Trade | A bullish breakout of a flag pattern in HDFC

HDFC is moving in an uptrend with a minor corrective decline. The range is classified as a flag and a breakout of falling minor trendline confirms a possible upside. HDFC is moving in an uptrend with a minor corrective decline from Nov 20 highs. The decline is on lower, contracting volumes and suggests a correction within an ongoing trend. The range-bound action can also be classified as a flag as it is on coming off a sharp rally. A breakout of falling minor trendline confirms a possible upside. Buy around Rs 2300-2310. Keep a stop below Rs 2250 and hold for a target of Rs 2400 and above that to Rs 2450.
Post a Comment
Read more