Nifty ended 22 points lower on Wednesday to form a Doji candle on the daily charts. A Doji candle is often considered a sign of indecision in the market. It suggests that buyers and sellers are at an equilibrium and a potential reversal could be on the horizon. The formation of a Doji candle after a decline in the market indicates that there is a possibility of a pullback rally. However, traders need to be cautious in the short term as the recent positive chart patterns have been negated.

On the daily chart, Nifty has been forming higher tops and higher bottoms in the recent past, which is a bullish pattern. However, the formation of the Doji candle has invalidated this pattern. This suggests that the market sentiment has turned bearish in the short term. Any upside bounce from here is expected to be a lower top formation.

Traders should closely watch the Relative Strength Index (RSI) for further confirmation of the bearish sentiment. The RSI is a momentum oscillator that measures the speed and change of price movements. A bearish crossover on the RSI indicates a potential downturn in the market. If the RSI crosses below the 50 level, it could signal a further decline in Nifty.

In conclusion, traders need to be cautious in the short term as the recent positive chart patterns have been invalidated. Any upside bounce from here is likely to be a lower top formation. Traders should closely watch the RSI for further confirmation of the bearish sentiment. If the RSI crosses below the 50 level, it could signal a further decline in Nifty.