Tech View: Nifty50 forms bearish candle; support seen at 17,600 level

A reasonable negative candle was formed on the daily chart with minor upper shadow, said Nagaraj Shetti of HDFC Securities, who said the pattern indicates a continuation of weakness in the market.

“The short term trend of Nifty50 continues to be negative. Presently, the daily 10-day EMA is offering support 17,600 level and the crucial support is placed around 17450-17500 levels as per the concept of change in polarity. Friday’s outcome of RBI’s mid quarter policy meet is expected to show fresh direction for the market. However, we expect Nifty50 to witness an upside bounce from the low of around 17,550-17,450 levels in the next couple of sessions,” Shetti said.

For the day, the index closed at 17,639.55, down 168.10 points or 0.94 per cent.

“Thursday’s extended correction below 17,700 was unexpected for us. Although both key indices gave a sharp bounce around the mid-session, the late correction poured complete water on this valiant attempt. Despite this, we still remain a bit hopeful and expect Nifty50 to give recovery from current levels. For the coming session, 17,550 followed by 17,400 are likely to provide support for the index and till the time, if we do not close below key levels, we would continue with our ‘Buy on decline’ strategy,” said Sameet Chavan of Angel One.

Mazhar Mohammad of Chartviewindia.in said the inability of the bulls to find support in the bullish gap zone of 17,791 and 17,700 is hinting that a short term downswing is in place.

“If the Nifty50 slips below 17,600, the weakness may ideally extend towards 17,400 where some support can be expected. Nevertheless, as the market is in a downward spiral for the last three consecutive sessions, ideally some stability shall be found around 17600 level. On such stability, a sideways consolidation can be expected. For the time being, it looks prudent to wait for some signs of strength before going long,” he said.