Nifty potential to move up is limited
The Nifty registered another lifetime high on institutional buying support. The Nifty gained 35.55 points and closed at 13,513.85. Metal stocks shined today, and the public sector companies were in the limelight.
The Nifty Metal index was up by 1.06 per cent and Nifty PSE index gained by 2.40 per cent. Maharatna ONGC, NTPC, GAIL and Coal India shares were the top gainers in the Nifty. After a long period, the Public Sector Enterprises shares dominated the benchmark indices. Even the PSU Bank index advanced by one per cent. The Nifty IT, Pharma and Auto indices declined in today's market. The overall market breadth is positive.
Soon after the Nifty reached another new lifetime high on Friday, it fell sharply and formed a long-legged doji candle. The last hour sell-off surprised many traders who were on the long side. It broke the 20-period average on a 75-minute chart but was able to close above that at the end of the day.
With today's move, 13,550-575 zone has become stiff resistance. At the same time, 8EMA is working as strong support in the current swing. At present, the support zone is at 13,358-13,400. Several doji candles formed in the recent past but failed to get a confirmation for the bearish implication.
Generally, a doji at lifetime requires a close below the doji close for bearish signals. In any case, on Monday if the Nifty closes with loss, then the market may form an intermediate top at 13,579.
All of our projected swing targets met. As we are mentioning for the past few days, its time to be in sideways till the clear trend emerges. Several technical parameters show that the upside potential is limited. Stay in sideways and avoid the uncertain trend.
(The author is a financial journalist, technical analyst, trainer, family fund manager)