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Tech View: Nifty forms large bearish candle; analysts say next stop 8,555

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NEW DELHI: Nifty on Tuesday slipped below the 9,000 mark for the first time since March 2017 and formed a long bearish candle on the daily chart.

This was the second session when the index formed a lower high. The index is in the deep oversold territory as suggested by the 14-day RSI indicator, but given the prevailing sentiment, analysts say it can revisit the recent low of 8,555. The bears did not allow the bulls to stretch their arms in early trade.

Eventually, the bulls succumbed to the pressure towards the end of the session, pushing the index below the important psychological mark. “The index is now set to test the swing low of 8,555.

On the other hand, resistance levels now shift lower to the 9,300-9,400 range,” said Gaurav Ratnaparkhi, Chief Technical Analyst at Sharekhan. On the monthly charts, Nifty has good support near the 8,500 mark.

The 100-day moving average of the index is placed at 8,435, breaching which the index could face more pressure, said Rohit Singre, Senior Technical Analyst at LKP Securities. “Nifty’s immediate resistance is placed in the 9,150-9,300 range.

Traders can use the said levels to create fresh shorts,” Singre said. The index, which traded higher earlier in the session, settled 230.35 points, or 2.5 per cent, lower at 8,967. “If the market continues to fall as being suggested by its unpredictable but high velocity, then on a breach of the 8,555 level one may get to see the logical target of 7,946 on the index,” said Mazhar Mohammad of Chartviewindia.in.




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