NEW DELHI: Nifty50 on Friday fell below its 200-day simple moving average and formed a small bearish candle on the daily chart. On the weekly charts, it fell below the 50-period moving average and formed a long-legged Doji candle around the support level of 17,150 level, suggesting market indecisiveness.
Normally, a formation of Doji after a reasonable decline or upmove signal impending reversal after the confirmation, said Nagaraj Shetti, technical research analyst of HDFC Securities.
“This could bring some hopes for the bulls to make a comeback from the lows in the coming week,” he added.
For the day, the index closed at 17,171.95, down 220.65 points or 1.27 per cent.
The interpretation of the weekly chart after bearish Evening Star during the previous week is that the market did not respond with any intensified selling, said independent analyst Manish Shah.
“In this environment, trend-following tools will have a limited value. For the rally to gather steam, we need to see Nifty50 moving above 17,450. In that case, it may move towards 17,650 and above that to 18,100. Nifty50 is in support at 16,800. A break below 16,800 and Nifty50 could see a steady decline to 16,400,” Shah said.
Mazhar Mohammad of Chartviewindia.in said it’s critical for the index to sustain above 17,149 and a failure to do so can initially extend the weakness towards 16,978 levels.
“As markets seem to be in a high volatile phase without a proper direction, it looks prudent to avoid index bets, at this juncture, till some signs of stability are visible,” he said.
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