Both FIIs and DIIs turn net sellers; Nifty forms shooting star-like pattern!

Nifty opened on a positive note and went on to touch a fresh all-time high of 16,712.25. However, it failed to build on early gains, and hence, slipped lower. In the end, it settled with modest gains of 10 points at 16,634.65. However, the broader market outperformed the frontline indices with Nifty Midcap 100 and Smallcap 100 adding 0.32 per cent and 0.79 per cent, which had lifted the morale of investors on D-Street.   

Among the sectoral indices, the majority of the sector ended in red with Nifty Realty and Nifty Media being the top losers. On the other hand, Nifty Energy and Nifty IT were the top gainers. Interestingly, on Wednesday, both FIIs & DIIs were net sellers in the equity market as FIIs were net sellers to the tune of Rs 1,071.83 crore while DIIs were net sellers to the tune of Rs 151.39. 

On the daily chart of Nifty, it has formed a shooting star-like pattern; however, it has maintained its rhythm of higher highs & higher lows since the last three sessions. Shooting star candle is interpreted as a bearish reversal candlestick pattern that typically occurs at the top of uptrends. 

Going forward, a close below the level of 16,617 could be the first sign of weakness. Meanwhile, a close below 16,376 will lead to a double top break down, which could have strong bearish implications for the index.   

Considering Thursday is F&O expiry of August contracts, we expect volatility to play its part. Hence, follow proper risk management rules while trading.