On the weekly scale, the index formed a ‘High Wave’ pattern, suggesting selling pressure at higher levels. The candle pattern of last three sessions indicates a crucial top reversal pattern, called 'Evening Doji Star', said Nagaraj Shetti of HDFC Securities. “This pattern indicates a downward trend reversal in the market, and one may expect more weakness in the coming week,” he said.
Arun Kumar, Market Strategist at Reliance Securities, believes any negative close on Monday could see the index test its 200-DMA at 10,855. For the day, the index fell 125.80 points, or 1.14 per cent, to 10,943.
Friday’s gains wiped off most gains made during the week. “A High Wave candle with a long upper shadow indicates that selling pressure is intensifying at higher levels. The index has negated the formation of higher lows of last seven sessions. A Doji candle followed by a bearish candle suggests a short-term pause in the positive momentum,” said Chandan Taparia of Motilal Oswal Securities.
Kumar advised investors to remain cautious and tread carefully. “Until and unless the index decisively crosses the 11,000-11,100 range, it will continue to hover in the 10,550-11,000 range,” he said.