Tech view: Nifty again forms bearish pattern, may correct till 10,150, 10,100
By Amit Mudgill
NEW DELHI: The Nifty50 formed lower high and lower low for the sixth consecutive session in a row on Tuesday. The index formed a bearish pattern while supports shifted lower. Traders should now brace for a correction towards 10,150-10,100 levels.
A pullback rally towards the 10,280 level is possible, but only if the index climbs above the 10,230 level on a sustainable basis.
On Tuesday, the index continued its weakness and tested its major support at 10,178, said Chandan Taparia of Motilal Oswal Securities. The 50-pack eventually settled 38.35 points, or 0.38 per cent, down at 10,186.
Taparia said the index needs to negate the formation of lower highs and lower lows to achieve short-term stability in the market. If it sustain below the 10,250 level, it would compound the weakness towards 10,120 and 10,080 levels. The upside resistance for the Nifty50 is seen at 10,250 and 10,280 levels.
Rajesh Palviya, Head Technical & Derivatives Analyst, Axis Securities, expects the Nifty to trend towards 10,150 and 10,100 levels.
“The Nifty50 continued to sustain below its 20-day SMA, which signals loss of strength, and we can see a correction towards 10,100-10,115 levels, which coincides with its 50-day SMA. Some pullback action from this support zone cannot be ruled out in the near term,” Palviya said.
Technical parameters on the weekly time frame charts are deteriorating .
Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory, Chartviewindia.in, said a multi-week top can be in place at 10,490 unless the bulls make a strong attempt to recover and get past the 10,335 level by the end of this week.
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Via:: Economic Times – Stocks