Nifty corrects after making a fresh all-time high due to negative global cues while the breadth of the markets also exhausts while Pharma advanced on the back of defensive buying. Nifty ended below 10500 marks making a small candlestick which is comparatively same as the previous day’s trading range indicating a formation of the possible tweezer top.
A tweezer top is a reversal pattern which is a topping formation which is indicative of a shift of bias in perception of the market. The first candle is a bullish candle which signals a fresh bullish buying while the second candle is having almost same high and low range while it is negative. It completely negates the previous day action and indicates an exhaustion in bulls while the swift change in a stronghold in case the tops being held for next trading sessions.
Secondly, We have also seen a exhaustion in the breadth of the market with as much as 37 decliners while 13 advancers of which mostly were pharma stocks which further indicates a defensive buying. Analysing the above price action we believe now the resistance for the market is placed at 10550 – 10560 levels which will be decisive for bulls while on downside 10470 will be crucial. in case a breach is seen then we may see a bearish move for short-term correction to 10350 while nullifying the 10560 mark and a follow up buying would continue the momentum to 10650.