Nifty forms bearish engulfing in daily chart – bullishness still intact

In the daily candlestick chart, Nifty has formed Bearish Engulfing pattern. It is one of the bearish pattern, which shows significance of possible domination from sellers in the market. The candle’s body eclipsed the price range of the previous session. The index opened on a higher note but soon witnessed selling pressure. It hit a low of 9,861. The index then recovered a bit to eventually close the day at 9,912, down 61.55 points, or 0.62 per cent.

Nifty showing the bearish engulfing in the daily candlestick chart
Nifty showing the bearish engulfing in the daily candlestick chart

It requires further follow-up to pull down the Nifty further. This one day move can be seen as profit booking. The overall bullishness is still intact as long as Nifty holds 9,850 levels. The same goes with Nifty Bank index, the bearish engulfing has engulfed last three day’s profit, however the long term bullishness is still intact.

As per our analysis, 34 out of 51 Nifty shares are maintaining the positive momentum and 17 shares are trending lower. For Nifty Bank index, 7 out of 12 shares are showing positive momentum and 5 shares are showing negative momentum.

Muthuraj Paulraj

Passionate about investing and trading in Options.

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