Tech view: Nifty forms Bearish Belt Hold, but looks set for a pullback
, ETMarkets.com|
Updated: Mar 05, 2018, 05.07 PM IST
NEW DELHI: The Nifty50 declined for the fourth consecutive session on Monday. During the four-day 223-point drop, the index slipped below its 100-day moving average, but held on to its broader 10,300-10,630 range that technical analysts have been talking about for some time now.
A breakdown below the moving average inside a wide consolidation range has less significance, as it often tends to whipsaw without providing clear signals, say analysts.
But the 10,300 level would be seen as crucial support and a breach below this important junction would extend the ongoing corrective move towards the ‘200-day SMA’ placed at around 10,140, said Sameet Chavan of Angel Broking.
For the day, the index tumbled 0.95 per cent to close just above the 10,350 mark (at 10,358) and form a 'Bearish Belt Hold' pattern on the daily charts.
"The stability of the market for more than two hours post lunch is hinting at a pullback, maybe towards the upper end of the consolidation range, which is placed around 10,630. Both the bulls and the bears will have equal balance of power inside the consolidation phases till the range gets broken on either direction,” said Mazhar Mohammad of Chartviewindia.in.
Chandan Taparia of Motilal Oswal Securities said the index has hit its lowest daily close in 51 sessions since December 18.
"The Nifty50 has been consolidating between 10,276 and 10,637 levels from last 18 sessions and has formed a contradictory pattern, which is generally a sign of sideways momentum with limited upside," Tapria said.
"Till the index remains below the 10,430 level, the weakness could take it towards the recent swing low of 10,276 level. On the upside, hurdles are seen at 10,430 and 10,525 levels," the expert said.
A breakdown below the moving average inside a wide consolidation range has less significance, as it often tends to whipsaw without providing clear signals, say analysts.
But the 10,300 level would be seen as crucial support and a breach below this important junction would extend the ongoing corrective move towards the ‘200-day SMA’ placed at around 10,140, said Sameet Chavan of Angel Broking.
For the day, the index tumbled 0.95 per cent to close just above the 10,350 mark (at 10,358) and form a 'Bearish Belt Hold' pattern on the daily charts.
"The stability of the market for more than two hours post lunch is hinting at a pullback, maybe towards the upper end of the consolidation range, which is placed around 10,630. Both the bulls and the bears will have equal balance of power inside the consolidation phases till the range gets broken on either direction,” said Mazhar Mohammad of Chartviewindia.in.
Chandan Taparia of Motilal Oswal Securities said the index has hit its lowest daily close in 51 sessions since December 18.
"The Nifty50 has been consolidating between 10,276 and 10,637 levels from last 18 sessions and has formed a contradictory pattern, which is generally a sign of sideways momentum with limited upside," Tapria said.
"Till the index remains below the 10,430 level, the weakness could take it towards the recent swing low of 10,276 level. On the upside, hurdles are seen at 10,430 and 10,525 levels," the expert said.
