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Tech View: Nifty50 forms indecisive ‘Spinning Top’; 10,040 level key

NEW DELHI: Late selloff hurt Indian equities on Wednesday, a..

NEW DELHI: Late selloff hurt Indian equities on Wednesday, as Nifty50 only managed to settle above the 10,150-mark despite a gap-up opening. The index formed an indecisive ‘Spinning Top’ on the daily chart, which was typical of a trading ahead of a big event, which this time was the US Fed policy outcome.

The index registered a ‘Spinning Top’ formation, as it faced selling pressure after retracing 38.2 per cent of its last leg of fall from the high of 10,478 level, said Mazhar Mohammad of Chartviewindia.in.

There is a higher possibility of a bottom around 10,040 levels. Post the Fed outcome if market stabilises, the rally can extend up to 10,380 levels. Contrary to this, a decisive breach of 10,130 intraday may again drag down the indices towards critical support zone of 10,040-9,980 levels, Mohammad said.

The 50-pack index closed the day at 10,155.25, up 30.90 points, or 0.31 per cent. This was lower than the opening level of 10,181.95, and hence a small bearish candle was formed on the daily chart.

Chandan Taparia of Motilal Oswal Securities said the bears are putting pressure at higher levels, but the bulls are not loosening their grip after the recent bottom of 10,049 level. “Nifty50 has to continue to hold above 10,141 to witness an upmove towards 10,276 level. Downside supports are seen at 10,050 level,” he said.

Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities, said, “If Nifty50 sustains above 10180 levels, then some pullback rally is expected towards 10,230-10,300. On the downside, an immediate short-term support remains around 10,100-10,070.”

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