intraday trade basis, but could not hold above that level, as profit booking set in at higher levels.
The index formed a ‘Doji’ candle on the daily chart as uncertainty continued. Analysts said the formation of indecisive candles over the past couple of days suggests the bulls are tired and profit booking may be around the corner. They said the index faces resistance in the 11,340-380 range and has support in the 11,240-250 zone.
“The back-to-back Doji pattern near the crucial resistance at 11,400 level could be a sign that the bulls are tired at higher levels. Such patterns more often result in the beginning of profit booking in the underlying from the highs,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
“If the bulls fail to push the index beyond this resistance level, it may lead to profit booking, dragging the index towards the 11,240-11,150 zone. On the flip side, a sustained trade above 11,380 level would extend the gains to 11,435-11,50 levels, which are the gap area resistances. Technical indicator RSI has turned south after forming a negative divergence on the shorter time frame chart, suggesting a temporary pause or sideways action,” said Aditya Agarwala of YES Securities.
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Gaurav Ratnaparkhi, Senior Technical Analyst at
Sharekhan felt that the 11380 level will act as a crucial resistance on a closing basis and will decide further course of action for the index.
“On the downside, the 11,250-11,230 zone is a near-term support to watch out for,” he said.
The risk-reward ratio does not seem to be favourable for a long-side index trade, said Mazhar Mohammad of Chartviewindia.in.