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Analysts, such as Nagaraj Shetti of HDFC Securities, said such a formation in a sideways index range does not offer any significant predictive signal. Other analysts said there are signs of exhaustion in the index after the recent rally and the NSE barometer could face still resistance in the 12,300-350 range.
“The formation of a Head & Shoulder pattern is still intact in Nifty as per the daily timeframe chart. The neckline of this pattern is in the 11,880-900 range. A sustainable move below this area could open up the market to sharp weakness in the days ahead,” he said.
Multiple technical parameters on the lower timeframe charts exhibited signs of exhaustion in momentum, warranting either a sideways consolidation or a correction going forward, said Mazhar Mohammad of Chartviewindia.in.
Moreover, upsides from the current level seem limited, as Nifty is heading towards a critical resistance around the 12,350 mark on the long-term charts. “We advise short-term traders to avoid long side bets for the time being, and considered shorting on any close below 12,199 level for an initial target of 12,100,” Mohammad said.
For the day, Nifty closed at 12,271, up 12.10 points or 0.10 per cent.
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