Nifty forms 2nd consecutive Dragonfly Doji candle
It is better to continue the long positions with the prior day's low as a stop loss. Stay with a cautiously optimistic view
image for illustrative purpose
![Nifty forms 2nd consecutive Dragonfly Doji candle Nifty forms 2nd consecutive Dragonfly Doji candle](https://www.bizzbuzz.news/h-upload/2024/06/19/1916749-nifty.webp)
Now, on the upside, the immediate target is 23770 and only below 23283 will we get reversal signals. In any case, if the index closes below Tuesday's gap area of 23490, which will give weaker signals. Though the trend is strong and making higher highs and higher lows, the momentum is lagging
The equities moved higher in a very tight-range session. The Nifty gained 92.30, or 0.39 per cent and closed at 23557.90. The Nifty Realty and Consumer Durables indices were the top gainers with 1.89 per cent and 1.59 per cent, respectively. The CPSE, Private sector Bank index, PSE, and Smallcap indices gained over 1.01 percent to 1.33 percent. The Pharma was the top loser with 0.35 per cent. All other sector indices closed marginal gains or losses. The market breadth is positive as 1520 advances and 1204 declines. About 282 stocks hit a fresh 52-week high, and 181 stocks traded in the upper circuit. HAL, Mazdock, Cochinship, and GRSE were the top trading counters on Tuesday in terms of value.
The Nifty hit another lifetime, fifth in the last six days. It once again closed below the opening level for the sixth day, and price action is limited to the first-hour range. The Nifty has formed the second consecutive Dragonfly doji. The volumes were higher than the previous day but much below the average. The daily range was shrunk to just 79.35 points. The index opened with a 105.2-point positive gap after a long weekend. A strong bullish bias did not sustain for a period and almost formed another open high candle. Now, the 8EMA is broken out of the rising channel, and the support level has risen to 23283, which is short-term support. As the index is forming indecisive and higher low candles, it is better to follow the trend as long as support is protected. In any case, the index closes below Tuesday’s gap area of 23490, which will give weaker signals.
Though the trend is strong and making higher highs and higher lows, the momentum is lagging. The RSI is hovering around the 60. The MACD histograms show a muted momentum. In these conditions, it is better to continue the long positions with the prior day’s low as a stop loss. There are no distribution days currently, which is a strong uptrend sign. Now, on the upside, the immediate target is 23770, which we mentioned earlier. Only below 23283 will get reversal signals. Stay with a cautiously optimistic view.
(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)