Tech view: Nifty50 forms large bear candle, headed for sub-10,100 level
By Amit Mudgill
NEW DELHI: A slide for the third consecutive day on Wednesday left the Nifty50 firmly placed in the bear grip, with the next port of call seen in the sub-10,100 territory.
In fact, the index hit a low of 10,094 in Tuesday’s trade, which was its lowest intraday level since October 12.
The Nifty50, though, recovered a bit following a retracement of almost 50 per cent of its last leg of rally from the lows of 9,687-10,490. The 50-pack index formed a large bear candle pattern on the daily chart.
By closing below the 10,170 level, the index breached a crucial support which it had established over the past few weeks.
Since the market consolidated briefly at that level in September and October, the Nifty50 is expected to respect this level, said Mustafa Nadeem, CEO, Epic Research.
The index closed the day at 10,118, down 68.55 points, or 0.67 per cent.
Supports are shifting lower, as the index is forming lower highs and lower lows for seven consecutive sessions now and is failing to hold up at crucial short-term moving averages.
But Bank Nifty is holding on tightly and that may bring some optimism at a time when the Nifty50 has lost 372 points from its November 6 high of 10,490 in just seven sessions.
Weakness could continue towards 10,080 and later 10,000 levels in this scenario, while the 10,250 level would pose a hurdle on the upside for the index, said Chandan Taparia of Motilal Oswal Securities.
“It will be too early to suggest that Wednesday’s low of 10,094 is going to be the bottom, unless follow-through buying emerges. Meanwhile, Bank Nifty has not succumbed to selling pressure of last five sessions and appears to be drawing strong support from the gap zone between 25,171 and 25,078 levels hit on November 1. As long as the Bank Nifty sustains above the said support level, the bulls can remain slightly optimistic,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in.
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Via:: Economic Times – Stocks