Nifty50 on Wednesday settled below its key support of 16,000 and formed a large bearish candle on the daily chart. Analysts said the bears have got an edge over the bulls, and some downside looks likely.
The long negative candle on the daily chart overlapped the previous day’s negative candle, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities, who believes the market action signals continuation of downside momentum and a lack of strength to sustain highs.
The index closed the day at 15,966.65, down 91.65 points or 0.57 per cent.
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan, said the index was facing resistance from multiple technical parameters in the last few sessions.
“Consequently, Nifty50 was witnessing consolidation in the range of 16,000-16,275. But on Wednesday, the index broke below the key support of 16,000 on a closing basis. Thus, the short-term structure has turned in favour of the bears. On the downside, the index is set to test the lower end of a rising channel on the hourly chart, which is near 15,800,” Ratnaparkhi said.
The analyst said any Nifty50 bounce towards 16,000-16,050 is expected to attract fresh rounds of selling.
Nifty Bank
Kunal Shah, Senior Technical & Derivative Analyst at , said the Nifty Bank breached the immediate support of 35,000 and witnessed continuous selling pressure throughout the day.
“It remains in a ‘sell’ mode and is likely to test the next support of 34,400 on the downside. The upside resistance is at 35,500. Once this level is taken out, traders should place aggressive bets on the long side,” Shah said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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