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NEW DELHI: The Nifty50 consolidated above the 11,550 level to make a fresh all-time closing high on Tuesday.
The index ended up a tad below its opening level, forming what resembled a Hanging Man pattern on the daily chart.
This pattern suggests the recent strong momentum in the Nifty50 might be getting over after gaining for three sessions.
Analysts noted a ‘Hanging Man’ pattern sends only mild warning of a possible top reversal.
The near-term trend is still positive, but there is a possibility of a downward correction from near the 11,600 level in the coming sessions, said Nagaraj Shetti of HDFC Securities.
For the day, the index rose 19.15 points, or 0.17 per cent, to close at 11,570.
Chandan Taparia of Motilal Oswal Securities said the index has been respecting its rising support trend line and it may need to extend its upward move towards 11,635 level after a hold above 11,500.
The medium-term support level is shifting higher to 11,400 level, he said.
Rajesh Palviya of Axis Securities sees the 11,550 level as an immediate support for the index.
If the index sustains below this level, profit booking may drag the index towards 11,530-11,500 zone, he said.
Mazhar Mohammad of Chartviewindia.in advised traders to book profit by making use of rallies towards 11,600 level and remain on sidelines till correction unfolds.
“In case the upswing continues, the current Nifty run shall extend up to 11,640 level.
However, based on trend studies across time frames, we believe the current leg of upswing shall end around 11,600 level, thereby triggering a short-term correction,” he said.
On the daily chart, the Nifty50 has seen a breakout from a Flag pattern, said Mustafa Nadeem of Epic Research, who sees the 11,480-11,460 zone as a point of inflection, below which the index may see consolidation.
