The Nifty ended in a Doji pattern for the fourth time in the last five sessions, indicating that the current uptrend was likely to end soon. This pattern, according to a technical analyst, was observed in January 2008 when the Nifty was trading over the 6,000 level. The market had corrected sharply from the higher level in January 2008 and it was feared that the current Doji pattern would be bearish as earlier. This also meant the end of uptrend and the beginning of a downturn.
Key index heavyweights such as Reliance Industries, HDFC Bank, BHEL, Bharti Airtel, NTPC and TCS, also closed in a Doji pattern indicating uncertainty among the participants. The trading volume on the futures & options (F&O) segment remained subdued as participants were not willing to take positions at the current level.
The Nifty September futures closed at a premium to the spot and shed 147,150 shares in the open interest indicating unwinding of long positions.
Kamalesh Langote, a technical analyst with vfmdirect.com, indicated that the market was in the last leg of its rise from the 2,500 level, and any upside was likely to be limited to 4,900-5,000. A correction can start any time from these levels or even before hitting the 3,500-4,000 levels.
