Nifty Forms a 'Doji': Breakout or Breakdown Next?
Nifty dropped to 24,013 as IT stocks crashed, forming a confused 'Doji' candle on the weekly chart. The market is at a tricky spot—either a trendline breakout to 24,600 or a drop to 23,620.
Namaste traders! Our market took a bit of a hit to end the week, with the Nifty 50 closing down 155 points at 24,013. The main villain here was the IT sector, which crashed over 5.5%. Why? Because a global IT giant named Accenture lowered its revenue expectations, which scared investors into selling Indian IT heavyweights like Infosys and TCS.
Now, let us look at the charts. On the weekly timeframe, Nifty has formed what we call a 'Doji' candle right near a falling orange trendline. A Doji looks like a plus sign (+) and simply means 'confusion'. The buyers tried to push the market up, the sellers tried to push it down, but neither won. We are standing exactly at the border of resistance.
What does this mean for a regular trader? We are in a 'make or break' zone. If the market finds strength to cross the trendline, we could see a fresh upward journey towards the 24,600 mark. But, if the IT weakness continues to drag us down, Nifty might fall to 23,800, and eventually slide down to 23,620 where an old 'gap' is waiting to be filled as support.
On the bright side, Foreign Institutional Investors (FIIs) were actually net buyers of Rs 4,859 crores in the cash market, which means big money hasn't totally panicked. Next week, keep an eye on Reliance after their AGM news about the Jio IPO, and let the market show a clear direction before jumping into big trades.
- Nifty IT crashed 5.55% dragging the broader market down.
- Weekly chart shows a 'Doji' candle at resistance, indicating extreme market confusion.
- FIIs bought Rs 4,859 crores, acting as a cushion against DII and retail selling.
- Reliance AGM announced Jio Platforms' draft IPO papers, a key trigger to watch next.
Prepared by Nitish Goyal, SEBI Registered Research Analyst (INH000025993), under EquityMuni / Trading Baniya. For educational purposes only and not investment advice. Investment in securities market are subject to market risks; read all related documents carefully.