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NEW DELHI: After a day of strong gains, the Nifty50 witnessed strong resistance around 10,440 level on Thursday, but eventually erased entire gains to settle flat.
In the process, the index ended up forming a small bearish candle at the upper end of last session’s trading range, which resembled a Bearish Belt Hold pattern.
Analysts noted that the advance-to-decline ratio for the day was 2:1, which suggests Thursday’s price action was a sign of consolidation.
The index needs to take out the crucial 10,435-10,450 range on a closing basis for any sustainable rally, they said.
Traders are advised to adopt a neutral stance and look to buy on any fresh breakout above 10,450, said Mazhar Mohammad of Chartviewindia.in.
For the day, the index fell 6.15 points, or 0.06 per cent, to 10,380.
“Thursday’s pattern indicated range-bound action.
The gap-down of October 19 has been filled at 10,435 level, but Nifty50 has not been able to move above the gap resistance in the 10435-40 range.
One can expect the uptrend to continue in the near term, after a small pause,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Chandan Taparia of Motilal Oswal Securities said a higher high formation in last four sessions indicated buying interest at lower levels.
The index, he said, needs to hold above 10,333 to extend its upmove towards the 10,450 -10,480 range.
Multiple supports are seen around 10,250 and 10180 levels, he said.
