Tech View: Nifty forms bearish candle; consolidation on the cards

A key Fibonacci level, which is near the 17,600 level, acted as a crucial barrier, said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan.

“Wednesday’s late selloff appears to be a part of the pullback, which is breaking up into lower degree waves. Nifty50 is expected to attract buying support again near the lower end of the falling channel. On the downside, 17,300-17,200 levels would offer some cushion. Unless that range breaks on a closing basis, Nifty50 is expected to witness gradual recovery,” Ratnaparkhi said.

Shrikant Chouhan of Kotak Securities expects the index to trade within the range of 17,340-17,520 ahead of Thursday’s monthly F&O expiry. “Below 17,340, the uptrend would be vulnerable,” he said.

For the day, Nifty50 closed at 17,415.05, down 88.30 points or 0.5 per cent.

“Technically, on the daily chart, Nifty50 has failed to sustain at higher territory as it has tasted the neckline of the Head & Shoulder pattern and moved lower, which indicates some weakness for the coming day. However, the previous day, the index took good support at lower Bollinger Band formation and pulled up from 17,200 levels, which would act as immediate support for the near term,” said Sachin Gupta, AVP, Research at Choice Broking.

Mazhar Mohammad of Chartviewindia.in said Wednesday’s selling can be attributed to the cautionary action of the bulls ahead of the monthly expiry session.

“In the next two sessions, it is critical for the markets to sustain above 17,216 levels on a closing basis. In that scenario, a sideways consolidation can be expected between in range of 17,700-17,200 levels,” he said.