Tech view: Nifty forms large bearish candle, as bears tighten their grip
NEW DELHI: Nifty50 settled below the 10,800 mark on Friday and formed a large bearish candle on the daily chart. The upper wick of the candle was long, suggesting sharp intraday reversal that eventually dragged the index below multiple short-term moving averages. The bears have tightened their grip and some more weakness is in the offing, said analysts.
For the day, the index fell 69.25 points, or 0.64 per cent, to 10,780.
With Friday’s fall, the index has broken the swing low of 10,798, which confirms the next impulse on the downside, said Gaurav Ratnaparkhi of Sharekhan.
“The hourly charts show Nifty has formed an impulse on the downside from 10,987 to 10,798 and retraced the same in a Three Wave pattern. On its way down, the index has breached a couple of crucial trend lines along with key daily moving averages. These bearish developments have taken place on the backdrop of a bearish short-term momentum indicator,” Ratnaparkhi said.
Nagaraj Shetti of HDFC Securities believes the key resistance level of 10,850 is proving too big a hurdle for Nifty50 to take out. The near-term trend looks weak and the 10,700-680 range will be the next downside support to watch out for, he said
“On the weekly scale, the index has formed a bearish candle and supply was visible at higher level, said Chandan Taparia of Motilal Oswal Securities. If the index holds below 10,850, it can slip towards 10,700 and then 10,650 levels,” he said.
Mazhar Mohammad advised traders to avoid long positions and make use of initial pullback attempts towards 10,850 to create fresh short positions with a stop loss placed above 10,950 on a closing basis.
For the day, the index fell 69.25 points, or 0.64 per cent, to 10,780.
With Friday’s fall, the index has broken the swing low of 10,798, which confirms the next impulse on the downside, said Gaurav Ratnaparkhi of Sharekhan.
“The hourly charts show Nifty has formed an impulse on the downside from 10,987 to 10,798 and retraced the same in a Three Wave pattern. On its way down, the index has breached a couple of crucial trend lines along with key daily moving averages. These bearish developments have taken place on the backdrop of a bearish short-term momentum indicator,” Ratnaparkhi said.
Nagaraj Shetti of HDFC Securities believes the key resistance level of 10,850 is proving too big a hurdle for Nifty50 to take out. The near-term trend looks weak and the 10,700-680 range will be the next downside support to watch out for, he said
“On the weekly scale, the index has formed a bearish candle and supply was visible at higher level, said Chandan Taparia of Motilal Oswal Securities. If the index holds below 10,850, it can slip towards 10,700 and then 10,650 levels,” he said.
Mazhar Mohammad advised traders to avoid long positions and make use of initial pullback attempts towards 10,850 to create fresh short positions with a stop loss placed above 10,950 on a closing basis.
