- Nifty slipped into decline today from the highs, post sharp upmove of the last two sessions and closed the day lower by around 13 points. Market breadth was negative today (AD ratio around 1:2 levels).
- Nifty opened today with slight positive note and moved up further during mid-part, after a choppy trade of early part. The sharp intraday weakness triggered during afternoon from the swing high of 10,131 levels and closed near the day’s low.
- A small body negative candle has been formed today with long upper shadow, which is indicating a negative pattern (this could be a bearish shooting star on further decline by next session.
- Nifty is now finding strong resistance around 10,135 levels (green line), which is near the all-time high of 10,137-2nd Aug.
- Daily trend strength indicator like 13 period ADX has turned up from near the crucial lower levels of 12-14. Normally, trended move occurs in the underlying during ADX turning up from around 12-15 levels. Hence, need to wait for confirmation to call as a beginning of down trend.
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Conclusion & Strategy: The short term trend of Nifty is dicey at the key hurdle of previous top around 10135 levels. Further weakness from here could confirm a top reversal pattern and that could possibly open up more weakness for the market for near term.