Nifty50 Forms Spinning Top Pattern, Bears in Command
The Nifty50 closed at a new high of 20,103 on September 14, but formed a Spinning Top pattern, indicating indecisiveness in the market after the recent rally. The index is likely to consolidate in the short term unless it gives a decisive close above 20,200 levels.
The Spinning Top pattern is formed when the real body of the candle is small, with a long upper and lower shadow. This indicates that there was a lot of volatility in the market, but the bulls and bears were evenly matched.
The Nifty50 opened higher at 20,128 and climbed up to 20,168, but saw some profit taking after an initial hour of trade and turned volatile. The index saw some recovery in last hour of trade amid consolidation and closed with 33 points gains.
The broader markets also closed higher, with the Nifty Midcap 100 and Smallcap 100 indices gaining 1.2 percent and 1.3 percent, respectively.
The Bank Nifty formed a Doji pattern, which is similar to a Spinning Top pattern. This indicates that the bulls and bears are evenly matched in the banking sector.
The next key level for the Nifty50 is 20,200. If the index manages to close above this level, it could resume its upward momentum. However, if the index fails to close above 20,200, it could consolidate in the range of 19,900-20,200 levels.
The broader markets are also likely to consolidate in the near term. The next key level for the Nifty Midcap 100 is 17,500 and the next key level for the Nifty Smallcap 100 is 15,500.
Overall, the market is likely to remain volatile in the near term. Investors should wait for a clear trend to emerge before making any major investment decisions.
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