Tech view: Nifty50 forms bearish crossover; MACD gives sell signal
, ETMarkets.com|
Updated: Nov 08, 2017, 05.32 PM IST
NEW DELHI: Another crack in the Nifty50 for another day. The early morning level became the day’s high and the index settled around the day's low. It formed a bearish crossover, as the MACD line fell below the signal line, sending out a sell signal.
The only respite for traders was the Nifty50’s closing above the 10,300 mark.
The formation of a small bearish candle after Tuesday’s bearish engulfing pattern and the recently breach of the rising channel connecting the swing lows of 9,687, 10,124 and 10,413 are all hinting at further weakness in the short term, said Chandan Taparia of Motilal Oswal Securities.
At close, the index was down 47 points, or 0.45 per cent, at 10,303. Wednesday’s session was a deja vu of Tuesday's trade. The index now stares at its 20-day moving average that stood at 10,277.
Taparia said as long as the Nifty50 remains below the 10,380 level, a short-term selloff towards 10,250 – the previous lifetime high mark – is likely.
The index may face resistance at 10,380 and 10,420 levels, he said.
Mazhar Mohammad of Chartviewindia.in believes the bears are slowly strengthening their grip on the market with the MACD generating a sell signal.
"Unless the Nifty50 recovers and start trading above the 10,400 level in the forthcoming session, the risk of it falling towards 10,100 looms large. That said, a reasonable support can be expected at the 10,240 level. If this level is violated on a closing basis, the correction may accelerate. Traders are advised to focus on stock-specific opportunities where strength is clearly visible,” Mohammad said.
The only respite for traders was the Nifty50’s closing above the 10,300 mark.
The formation of a small bearish candle after Tuesday’s bearish engulfing pattern and the recently breach of the rising channel connecting the swing lows of 9,687, 10,124 and 10,413 are all hinting at further weakness in the short term, said Chandan Taparia of Motilal Oswal Securities.
At close, the index was down 47 points, or 0.45 per cent, at 10,303. Wednesday’s session was a deja vu of Tuesday's trade. The index now stares at its 20-day moving average that stood at 10,277.
Taparia said as long as the Nifty50 remains below the 10,380 level, a short-term selloff towards 10,250 – the previous lifetime high mark – is likely.
The index may face resistance at 10,380 and 10,420 levels, he said.
Mazhar Mohammad of Chartviewindia.in believes the bears are slowly strengthening their grip on the market with the MACD generating a sell signal.
"Unless the Nifty50 recovers and start trading above the 10,400 level in the forthcoming session, the risk of it falling towards 10,100 looms large. That said, a reasonable support can be expected at the 10,240 level. If this level is violated on a closing basis, the correction may accelerate. Traders are advised to focus on stock-specific opportunities where strength is clearly visible,” Mohammad said.
