Bulls Exhausted At Higher Levels

Importantly, bearish engulfing has formed at an upper band of Donchian Channel.

The 34 period Donchian channel indicates there is resistance at the all-time high of 15,431. These lines are generated by the moving average and the upper & lower bands are formed around a median band.

The upper band marks the highest price over 34 periods while the lower band marks the lowest price over 34 periods.

On the weekly chart, we are witnessing doji candlestick pattern which is indecisive in nature.

The short term trend can only emerge on a break out above 15,431 and below 14,450. Till then markets might consolidate and stock specific action will prolong.

Conclusion

The bulls and bears fought in a truncated week and the bulls failed to capitalise on the gap-up openings.

The weekly chart formed a doji candle stick which is indecisive in nature. However, the daily chart formed the bearish engulfing indicating a pause to the bullish momentum, though the confirmation will be below 14,950.

Nifty is like to consolidate and a fresh trend might emerge only below 14,450 or above 15,400.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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