Tech View: Nifty50 slips below 17,700; sideways movement likely

Mazhar Mohammad of Chartviewindia.in said as long as the bulls are able to defend 17,600, Nifty50 may remain sideways with a positive bias.

“In that scenario, the strength shall initially extend towards 18,100 levels. Contrary to this, a breach of 17,600 on a closing basis may pave the way for further weakness. In that scenario, the downswing shall initially extend into the zone of 17,400-350 levels where some meaningful support exists. For the time being, it looks prudent to remain neutral whereas existing long index positions should be held with a stop below 17,600 level,” Mohammad said.

For the day, the index closed at 17,674.95, down 109.40 points or 0.62 per cent.

Nagaraj Shetti, Technical Research Analyst at HDFC Securities said a small negative candle was formed with gap down opening, which was placed beside the long positive candle of Friday. Technically, this pattern reflects ongoing sideways movement in the market at the support of 17,600 level, he said.

Shetti said positive sequence like higher tops and bottoms is active and there is no confirmation of any higher bottom reversal as of now. “Nifty is currently placed at the 10-day EMA around 17650 levels and a move below this area could drag Nifty down to another support of 20-day EMA around 17,450 levels.”

Nifty as per the weekly chart is showing weak signal, he said, adding that a Doji type candle pattern was formed last week at the important resistance of 18150 levels; hence, any attempt of upside bounce could attract selling pressure in the near term.

Shrikant Chouhan of Kotak Securities said the 17,600 retracement support zone would act as key support levels for the Nifty50.

“Above the same, a strong possibility of a pullback rally up to 17,850-17,900 is not ruled out. On the flip side, below the 17,600 range breakout, the market could retest the levels of 17,500-17,430,” he said.