By Nagaraj Shetti
Technical Research Analyst, HDFC Securities
Where we are: After showing choppy trading in the previous 5-6 days, the Nifty finally gave up its effort to scale up on Friday and witnessed a sharp crack by around 135 points on the day of the budget. A long negative candle was formed on Friday that has engulfed previous four sessions high-low range. This pattern signals formation of a bearish engulfing candle. Technically, formation of important swing high during important events like budget needs to be watched carefully. Hence, Fridays high of 11,981 is going to be a crucial near-term swing high for the market.
What is in store: On weekly charts, a small body negative candle was formed with a long upper shadow. Technically, this formation signals a bearish shooting star type pattern, but not a classical one. The recent upside bounce seems to have completed and a formation of long upper shadow in the last two weeks candles indicates emergence of selling pressure at the highs.
What could traders do: The near term trend of Nifty seems to have reversed after forming lower top at 11,981. The overall chart pattern signals more weakness in this week. Any upside recovery attempt frRead More – Source