A DOJI

In the near month contract for Nifty Futures (September), a DOJI has been made today. The DOJI is a bar in which the open and close are roughly equal. Today’s DOJI comes after a sustained advance. The Japanese attach great importance to the DOJI. On a DOJI day,the buyers and sellers are equally matched. That is why after a daylong battle, buyers could not push prices up, while sellers could not push prices down. Therefore, the open and close were equal, hence the DOJI.

Why is it significant? So far, the bulls have been in total control of the market. There has been no confusion about the direction. But, on a day when higher highs were made, bulls couldn’t push closing prices could not go above the open. Therefore, there has been a subtle shift in the balance of power from bullish to neutral. Probably, some of the bulls have retreated. This could be just a short term blip. We will see. A close below the DOJI low will confirm that the scenario is shifting to neuutral. A close above the DOJI high will tell us that the DOJi was just one day of consolidation. Interesting!