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NEW DELHI: The Nifty50 on Tuesday advanced for the fourth consecutive session and formed an indecisive 'Doji' candle on the daily chart.
Analysts said the upside for the index looks limited in the short term and it may be time investors should start considering profit taking before the tide turns.
Tuesday's narrow trading range did not depict the right picture.
There was a perfect balancing act from a few index heavyweights, said Sameet Chavan of Angel Broking.
“The index is getting a bit tired as it approaches major resistance in the 10,400-10,500 zone.
Traders are advised to start booking profits if the index enters this territory.
One needs to be very agile while picking up stocks.
For the coming session, the immediate hurdle will be in the 10,430-10,478 range, whereas on the downside the 10,381 and 10,350 levels are likely to act as key support,” said Chavan.
Earlier, a Doji pattern was observed on the index in the 10,430-10,440 range, which has proved a key resistance zone in last six weeks.
"This resistance also coincides with 50-day and 100-day SMA values.
Any sustainable rally above this will give Nifty strength towards the 10,500-10,530 range.
On the lower side, the 10,380 level will remain a crucial support and any violation of this level will lead to some correction towards the 10,350-10,300 range, the expert said.
On Tuesday, the Nifty50 settled the session at 10,402, up 22.90 points, or 0.22 per cent.
Mazhar Mohammad, Chief Strategist for Technical Research Trading Advisory, ChartviewIndia, said getting past the 50-day SMA is a prerequisite for the index to log further gains.
“It looks prudent for traders to book profit and remain on the sidelines till a breakout occurs above the 10,450 level on a closing basis,” he said.
