Tech View: Nifty50 chart suggests weakness; support seen at 17,700 level

NEW DELHI: Nifty50 on Wednesday saw a gap-down opening and ended up forming a small bearish candle on the daily chart. It was the second day of fall for the index. Analysts said Nifty50 has support near 17,700 level while they see resistance at around 17,900 level.

Wednesday's pattern confirms a short-term top reversal at the swing high of 18,114 level and a beginning of a downward correction in the market, said Nagaraj Shetti of HDFC Securities.

"The overhead resistance of the down sloping trend line seems to have acted as a crucial hurdle for the market and resulted in a trend reversal down. Presently, Nifty50 is placed above the previous upside gap of April 4 at 17,800 level. If there is any gap-down opening on Thursday and the gap is not filled during intraday, it could signal a formation of a crucial bearish Island reversal pattern as per daily timeframe chart. In such circumstances, the Nifty could even slide down to the 17,000 mark," Shetti said.

For the day, the index closed at 17,807.65, down 149.75 points or 0.83 per cent.

Mazhar Mohammad of Chartviewindia.in said the index is still sustaining above the bullish gap zone of 17,791 and 17,703 levels. If it dips further in this zone, said he, the index may attract some buying interest.

"Sustaining above 17,703 levels, Nifty50 can eventually make an attempt to test recent highs present at 18,115 level. For intraday traders, some resistance can be expected at the 17,920 level," he added.

Independent analyst Manish Shah said that the index needs to trade above 17,930-17,950 for a recovery towards 18,100-18,200. "Given the forthcoming RBI policy, one may see subdued market action for some time. Brace for a small rally if support at 17,700-17,750 holds," he said.