NEW DELHI: Nifty50 on Tuesday slipped below the psychological mark of 17,000 level and formed a bearish Inverted Hammer-like candle on the daily chart. Analysts said the index may find some support near 16,800 while they see some resistance for the index at 17,200 levels.
Chandan Taparia of Motilal Oswal Securities said that Bearish Inverted Hammer indicates that follow up activity is missing and every bounce is being sold into.
“As long as the index holds below 17,200, any bounce could be sold into. A weakness may be seen towards 16,800 and 16,500 levels. Medium term hurdles can be seen at 17,350 and 17,500 levels,” Taparia said.
During the session, the intraday bounce fizzled out near the upper end of the dynamic falling channel and the 40-hour exponential moving average. The index has given closing below 21 & 9 DMA which points out bears are active. Moreover, daily momentum indicators — MACD & Stochastic were trading with negative crossovers which suggests bearish movement in the upcoming session.
“Going ahead, the low point of the recent Doji formation i.e. 16,782 will be the key support to watch out for. Till that holds, the Nifty50 can go for a base formation in the range of 16,800-17,200,” said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan.
For the day, the index closed at 16,983.20, down 70.75 points or 0.41 pe recent.
“Unless the Nifty50 manages a sustainable close above 17,000 level, the index can breach the recent corrective swing low of 16,782 levels. In that scenario, the initial logical target of 16,325 can be expected. Eventually the test of the 200-day moving average — placed at around 16,100 — can’t be ruled out. upside rallies, if any, shall remain capped around 17,300 levels,” said Mazhar Mohammad, Chief Strategist at Chartviewindia.in.
Independent Analyst Manish Shah said the underlying trend is down but the oscillators are oversold.
Some time in the near future, there will be a rebound from the lows. A move above 17,350 could signal there could be at least a couple of days of rally to the top end of the falling channel at 17,650, he said.
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