Nifty forms Dragonfly Doji indicating reversal

Nifty formed a Dragonfly Doji candle on the weekly chart after forming a Doji candle in the preceding week once again indicating uncertainty, which means a dead cat bounce is on the cards.

Sep 08, 2019 04:09 IST India Infoline News Service

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Markets saw decent momentum in the last three sessions of the week, however, failed to carry forward previous week’s gains as indices closed in the red. Nifty formed a Dragonfly Doji candle on the weekly chart after forming a Doji candle in the preceding week once again indicating uncertainty, which means a dead cat bounce is on the cards. Going forward, the long term 200-DMA levels of 11200 will act as a stiff resistance while on the downside, 10750 mark is going to act as a strong support area for the Nifty.

Bank Nifty on the other hand too formed a Dragonfly Doji candle on the weekly chart indicating short term reversal is likely. The index has also found support around the falling trendline of the previous breakout zone on a weekly basis. Going forward, 26600 zone is the crucial support area while on the upside, 27650 is the important resistance levels.

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