NEW DELHI: Nifty50 on Tuesday edged higher and formed a Hanging Man candle on the daily chart. During the day, the index faced resistance in the 11,950-60 range. Analysts say the index is prone to profit taking up to 12,041 level. They say the risk-reward is turning in favour of the bears.
“In terms of Fibonacci retracement, Nifty50 has been forming distribution near the 78.6 per cent retracement mark in the last few sessions. The index seems to be preparing for the next downward leg. The risk-reward ratio continues to favour the bears to initiate a short position,” said Gaurav Ratnaparkhi at Sharekhan.
Rajesh Palviya of Axis Securities said Nifty needs to cross and sustain above 11,960 level to continue its rally towards 12,000, 12,050 levels.
“However, if it breaks below 11,920 level, it would witness selling pressure, which will take Nifty towards the 11,880-11,850 range,” he said.
For the day, the index closed at 11,928, up 4 points, or 0.03 per cent. “The ongoing move still looks like an upward corrective reaction to the big reversal candle witnessed from the high of 12,041 on May 23. Hence, the market appears to be in the process of forming a short-term top around 12,000. Read More – Source