Tech View: Nifty50 forms bearish candle; index may see consolidation ahead

The negative candle had a minor upper and lower shadow. Technically, such a candle indicates a completion of recent uptrend and a beginning of short term downward correction from the high according to Nagaraj Shetti of

Securities.

For the day, the index closed at 16,631, down 88.45 points or 0.53 per cent.

“The short term uptrend of Nifty50 seems to have reversed down from near the important resistance of 16,800 level. The overall chart pattern indicates further weakness down to 16,350-16,300 levels in the next few sessions. Intraday resistance to be watched at 16,700 level,” Shetti said.

Nifty50 is facing a barrier at 16,750-16,800, said Independent Analyst Manish Shah.

Nifty50 needs to break out of this barrier and once this happens Nifty50 should see more upsides towards 17,100-17,250, he said, adding that as long as the support of 16,480-16,450 holds, the positive trend remains intact.

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said that the index was trading near the upper end of a rising channel for the past three sessions. The index was inching higher along with the upper channel line as it is an upward sloping channel, he said.

“However, the Nifty50 is now parting from that upper channel line on the downside. The index seems to have stepped into a short term consolidation. The hourly momentum indicator developed a negative divergence, which is also suggesting the same. Structurally, the index can witness a brief consolidation in the range of 16,480-16,750 in the coming sessions,” Ratnaparkhi said.

Nifty Bank

Nifty Bank formed a small-bodied Bearish candle on the daily scale and has been forming higher high-low for the last six sessions.

“It has to hold above 36,666 to witness an up move towards 37,000 and 37,250 while on the downside support exists at 36,500 and 36,250 levels,” said Chandan

of Securities.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)