NEW DELHI: The Nifty50 on Monday traded in a narrow range to eventually settle the day flat. The index made an indecisive small bearish candle resembling 'Doji' on the daily chart ahead of the outcome of Karnataka elections.
While the event will dominate the market on Tuesday, analysts believe that the 10,830 level would pose as immediate resistance, while a move below 10,770 can trigger short term selloff.
"The index managed to form a higher high-higher low pattern. The index has near-term support at 10,770. Any violation of this will cause a corrective move towards 10,730-10,700 range. A sustainable move above 10,830 level will trigger rally towards 10,860-10,900 levels," said Rajesh Palviya, Head – Technical & Derivatives Analyst at Axis Securities.
The index closed the day at 10,806.60, up 0.10 points. The daily strength and momentum indicators were in the positive terrain.
"The followup buying was missing. However, the continuation of higher lows for last trading sessions suggests that supports are gradually shifting higher. Till the index holds above 10,785, it will extend its move towards 10,888," said Chandan Taparia of Motilal Oswal Securities.
Nifty50 registered a Doji kind of indecisive formation ahead of the major event suggesting that market participants lacked directional clues and has taken cautious stance, said Mazhar Mohammad of Chartviewindia.in.
"Although technical picture is looking somewhat positive, but market is bound to get influenced by the event. For the day, traders are advised to prepare for wild swings and focus on larger trends rather than getting worried by the volatility. If Nifty50 registers a short term top at Mondays high of 10,834, the correction may eventually get extended up to the zone of 10,534-10,456 over couple of sessions," said Mohammad said.