NEW DELHI: The Nifty50 traded in a narrow range on Thursday to end up forming a small bearish candle on the daily chart. Selling was seen at higher levels, suggesting indecisiveness among traders.
A slew of technical parameters are demanding caution, even as supports shifted higher.
“A negative divergence and overbought levels are warranting a short-term correction. But if the indices chose to defy these parameters and move ahead, the current upswing shall get extended initially up to 11,560 level,” said Mazhar Mohammad of Chartviewindia.in.
Narrow trading ranges for last four sessions suggest the index is positioning itself for a big spurt on either direction, Mohammad said.
For the day, the index rose 20.70 points, or 0.18 per cent, to a fresh record closing high of 11,470. The 14-day relative strength index (RSI) stood at 71 level, considered overbought zone.
A few technical parameters are signalling caution, even though there is no reversal signal yet. “The underlying trend structure of Nifty50 is still positive, and there is no formation of any reversal pattern at the highs. On the upside, watch the 11,600 level in the short term, said Nagaraj Shetti of HDFC Securities.
The Nifty50 has been forming higher tops and higher bottoms and every small decline is being bought into as supports are shifting higher gradually, said Chandan Taparia of Motilal Oswal Securities.
The index has to continue to hold above 11,435 to extend its move towards 11,500 and then 11,600 levels. On the downside, support is seen at 11,350 level, he said.
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