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NEW DELHI: The Nifty50 climbed to its fresh closing high on Monday, but ended up making a small bearish candle on the daily chart that resembled a 'Doji', suggesting investors were indecisive at higher levels.
Upside appears to be capped and the index may need to hold above 11,368 levels for at least during the first hour of Tuesday trading for any limited gains, say analysts.
A small body negative candle has been formed at the highs, which indicates a possibility of further consolidation for the next session, said Nagaraj Shetti of HDFC Securities.
"The underlying short-term trend remains positive, still there is no formation of any convincing top reversal pattern at the highs.
The expected consolidation or minor correction is unlikely to damage the uptrend of the market," he added.
If the index consistently trades below 11,368 level in the first hour on Tuesday, it may come under pressure, said Mazhar Mohammad of Chartviewindia.in.
"In such a scenario test of recent low of 11,234 can’t be ruled out.
For the time being, upside appear to be capped in 11,450-11,500 range.
It looks prudent on the part of traders to book profits and wait for more directional clarity or a dip towards 11,250," the expert said.
On Monday, the index rose 26.30 points, or 0.23 per cent to close at 11,387.10.
“The price action on the daily chart has resulted in ‘Doji’ candlestick pattern, which signals indecisiveness at higher levels.
The 11,370 level remains crucial, as any violation of this will cause further profit booking towards 11,340-11,300 levels," said Rajesh Palviya of Axis Securities.
The immediate resistance is placed at around 11,400 level and any sustainable move above this will cause strength towards 11,430-11460 level, the expert added.
"The index is making higher highs while relative strength index is making lower highs, which indicates absence of momentum and thus a cautious trade on the market if an immediate support is broken," said Chandan Taparia of Motilal Oswal Securities.
Meanwhile, the the strength Indicator RSI continues to trade upward, while the momentum indicator Stochastic remained in the negative mode, indicating a slowdown in momentum.
