INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The bears were in the driving seat on Tuesday, following a two-day mauling of the bulls
The table seems to have turned with the formation of back-to-back long bearish candles on the daily chart
The Nifty50 may brace for the 11,000 level soon
For the day, the index plunged 150.60 points, or 1.32 per cent, to hit 11,287
The index is fast approaching the 161.8 per cent Fibonacci extension level placed at 11,264, which coincides with its 50-DMA.
A trade below
this level can drag the index to 11,208, the 189 per cent Fibonacci extension, said
Aditya Agarwala, Technical Analyst at YES
Securities.“With a 300-point drop in two sessions, the Nifty50 has drifted towards its 50-EMA
It recently broke its rising trend line
On the daily chart, it formed a bearish head-and-shoulder pattern, which has bearish implications
Besides, a Bearish Belt Hold is clearly visible on the weekly scale
After the last week’s Bearish Engulfing candle, this is confirming a change in momentum,” said Chandan Taparia of Motilal Oswal
Securities.
Nagaraj Shetti of HDFC Securities observed that the number of times a long bear candle has been formed on days of declines is
This contrasts with the small positive candles (absence of large bullish candles) on any upside bounce
This is signalling a sharp downward reversal in the market, he said.
A pullback from the 11,264 level cannot be ruled out as the RSI has
reached oversold levels on the shorter time frame charts.
The index is sustaining below its 20-day SMA and it breached the 50-day SMA at
11,273 in Tuesday’s trade
“Any sustainable move below the 11,270 mark will cause further weakness and take the index to the 11,230-11,200 levels
Above 11,300, intraday pullbacks cannot be ruled out,” said Rajesh Palviya, Head – Technical Derivatives Analyst, Axis Securities.
