NEW DELHI: The Nifty50 on Tuesday saw selling pressure at its key resistance level of 18,350, as the index ended up forming a bearish candle on the daily chart that engulfed candles of the last four sessions. A fall below the 18,100-080 range may trigger further weakness, analysts warned.
The index has bridged the bullish gap present in the zone of 18,128 and 18,081, with an intraday low of 18,085 level.
“Selling may get accentuated if the Nifty50 consistently trades below 18,080 levels. In such a situation, it can head to lower levels with initial targets present around the 50-day exponential moving average, whose value is placed at the 17,600 level. Contrary to this, if the bulls manage to defend 18,080 on a closing basis sideways, consolidation can be expected,” said Mazhar Mohammad of Chartviewindia.in.
Chandan Taparia of Motilal Oswal Securities said that the index had broken a rising support trend line on a daily scale. It needs to hold above 18,081 for an upmove towards the 18,250 and 18,350 levels, Taparia said, adding that support for the index exists at 18,000 and 17,900 levels.
For the day, the index closed at 18,113.05, down 195.05 points or 1.07 per cent.
“Not only a bearish engulfing pattern, but a bearish harmonic pattern was also visible on the daily chart,” said Rupak De, Senior Technical Analyst, LKP Securities.
The momentum oscillator 14-day RSI entered in a bearish crossover, he said. “On the higher end, resistance is visible at 18,350-18,400, whereas support is visible at 18,000-17,850,” De added.
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