On Monday, the domestic benchmark indices reached a new high but experienced profit booking at higher levels, resulting in a flat closing with a positive bias. The Sensex gained 31.68 points to close at 72,271.9, while the Nifty 50 ended 10.50 points, or 0.05%, higher at 21,741.90.
The daily chart of the Nifty 50 shows the formation of a small body of positive candles with upper and lower shadows. This pattern indicates the development of a high wave type candle pattern, suggesting high volatility in the market at the highs.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the positive chart pattern, characterized by higher tops and bottoms, remains intact on the daily chart. The Nifty is currently forming a new higher top in the sequence, indicating an ongoing uptrend. However, there is no confirmation of any top reversal pattern in the high market.
Shetti believes that the near-term uptrend status of the Nifty remains intact. However, the market has started to exhibit high volatility around the new highs, which indicates the possibility of another round of downward correction from the highs.
To nullify the present bearish effect and potentially open more upside for the near term, a decisive move above 21,850 levels is expected, as suggested by Shetti.
It is important for investors and traders to closely monitor the market conditions and take into account the high volatility. While the current trend remains positive, the potential for a downward correction should not be ignored.
Market participants should exercise caution and consider implementing risk management strategies to protect their investments. This may include setting stop-loss levels, diversifying portfolios, and staying updated with market news and analysis.
Additionally, it is crucial to conduct thorough research and analysis before making any investment decisions. By staying informed about market trends, economic indicators, and company-specific news, investors can make more informed choices and mitigate risks.
Overall, the domestic benchmark indices have reached new highs but are experiencing profit booking and high volatility. The near-term uptrend remains intact, but caution should be exercised as the market may undergo a downward correction. Investors should stay vigilant, implement risk management strategies, and stay informed to navigate through the current market conditions.