Tech view: Nifty50 forms a large bear candle; investors turn cagey
, ET Bureau|
Jan 01, 2018, 04.48 PM IST
NEW DELHI: The Nifty50 made a large bear candle on Monday, following a late selloff that pulled the index down below its five-day moving average at close.
The day's high of 10,537 on the index was almost the same as Friday's high, suggesting that market participants were reluctant to push the index higher amid public holiday in key markets globally. Traders, though, respected the index's 13-day moving average around the day's low of 10,423.
"Monday's price action was nothing short of a reversal formation, as the index registered a large bear candle and turned down from the highest point of the day in the last hour of trade. Any follow-through selling in the next session shall confirm the short-term reversal. The index could be heading to much lower levels with initial targets placed around the 10,250 mark," said Mazhar Mohammad, Chief Strategist, Technical Research for Trading Advisory at Chartviewindia.in.
As long as the index trades below the 10,550 level, the bears will try to be in a commanding position, said Mohammad.
On Monday, the Nifty50 lost 95 points, or 0.90 per cent, to settle at 10,435. The 10,400 level has acted as a support in the last six-seven sessions.
"Since the Nifty50 is trading near the 10,400 mark, we should be cautious. If it sustains below 10,400 on Tuesday, you can definitely see more correction and the Nifty can test its 50-day moving average. As long as the Nifty traded above 10,400, you can hold your long positions but keep the stop loss below 10,400. If it breaks that level, then you can see a 100 points kind of correction from 10,400," said Manas Jaiswal, Manas Jaiswal Technical Research Group.
The day's high of 10,537 on the index was almost the same as Friday's high, suggesting that market participants were reluctant to push the index higher amid public holiday in key markets globally. Traders, though, respected the index's 13-day moving average around the day's low of 10,423.
"Monday's price action was nothing short of a reversal formation, as the index registered a large bear candle and turned down from the highest point of the day in the last hour of trade. Any follow-through selling in the next session shall confirm the short-term reversal. The index could be heading to much lower levels with initial targets placed around the 10,250 mark," said Mazhar Mohammad, Chief Strategist, Technical Research for Trading Advisory at Chartviewindia.in.
As long as the index trades below the 10,550 level, the bears will try to be in a commanding position, said Mohammad.
On Monday, the Nifty50 lost 95 points, or 0.90 per cent, to settle at 10,435. The 10,400 level has acted as a support in the last six-seven sessions.
"Since the Nifty50 is trading near the 10,400 mark, we should be cautious. If it sustains below 10,400 on Tuesday, you can definitely see more correction and the Nifty can test its 50-day moving average. As long as the Nifty traded above 10,400, you can hold your long positions but keep the stop loss below 10,400. If it breaks that level, then you can see a 100 points kind of correction from 10,400," said Manas Jaiswal, Manas Jaiswal Technical Research Group.
