NEW DELHI: The Nifty50 signed on Friday's session and the week at a record closing high. The index made a Dragonfly Doji pattern on the daily chart and a bullish candle on the weekly chart.
In a Doji pattern, the index opens high and closes around the same level, suggesting a balance of power between the bulls and the bears.
"The index formed a Dragonfly Doji candle with the long lower shadow, which indicates that the decline got bought into. At the same time, the bears were fighting hard. The index formed a bullish candle on the weekly chart. It has to continue to hold above 10,600 to extend its upmove towards 10,750 and 10,800 levels," said Chandan Taparia of Motilal Oswal Securities.
Taparia says the downside support for the index is placed firmly at the 10,600 level.
On Friday, the index hit a lifetime high in morning trade, only to slip later. It tested the 10,600 level before rebounding to settle higher. At close, it stood at 10,681, up 30.05 points, or 0.28 per cent.
Mazhar Mohammad of Chartviewindia.in said when a Dragon Fly Doji is formed, it is seen as a major turning point, where the bulls and the bears try to establish supremacy.
However, when the weekly price chart is seen in isolation, it looks like a breakout from the consolidation pattern with a decent bullish candle.
"A strong follow-through on Monday shall strengthen the bullish sentiment. Else the market will continue its insipid way of trading going forward till it breaks down," the analyst said.
Traders can carry their bullish bets with a stop loss below 10,592 on a closing basis and look for a target of 10,750, he said.