Tech View: Nifty forms bearish candle; support seen at 17,250-300 levels

On the weekly scale, the index formed an indecisive candle. Analysts see support for the index in the 17,250-300 range.

“Nifty50 has given up almost all the gains of the last two trading sessions. In this process, it also filled the bullish gap placed in the zone of 17,339-306 level. Hence, going forward, it needs to sustain above 17,300 levels to retain positive bias. A close below 17,300 level can drag down the index towards 17,000 level,” said Mazhar Mohammad, Chief Strategist – Technical Research, Chartviewindia.in.

Mohammad said a close examination of Nifty50, suggests the price action is unfolding in a triangular formation that is nearing its end.

“Therefore, going forward, a swift move can be expected in either way depending on the direction of the breakout. It looks prudent to avoid long side bets,” he said.

For the day, the index closed at 17,374.75, down 231.10 points or 1.31 per cent.

Chandan Taparia of Motilal Oswal Securities said that a bearish candle on the daily scale with long lower shadow and a small-bodied bearish candle on weekly scale indicate tug of war between the bulls and the bears. Taparia said it is important for Nifty50 to hold above 17,350 for an upmove towards 17,500 and 17,777 levels. He sees support for the index at 17,250 and 17,100 levels.

“Once again, the index has slipped below the 50-EMA. The trend looks sideways to negative for the near term. On the lower end, support is visible at 17,250-17,265. On the other hand, Nifty needs to move beyond 17,640 to change the current bearish trend,” said Rupak De, Senior Technical Analyst at LKP Securities.