Tech View: Nifty forms small bearish candle; 15,670 level remains key support

Synopsis

Analysts said the index has been respecting its support of 15,671 on a closing basis and as long as it keeps respecting that, chances of some bounce cannot be ruled out. They see support shifting to 15,400-300 levels, if the level is breached.

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For the day, the index closed at 15,692.15, down 39.95 points or 0.25 per cent.

New Delhi: Nifty50 on Wednesday fell for the fourth straight day. This formed a small bearish candle on the daily chart, with a long upper wick, reflecting selling at highs.

Analysts said the index has been respecting its support of 15,671 on a closing basis and as long as it keeps respecting that, chances of some bounce cannot be ruled out. They see support shifting to 15,400-300 levels, if the level is breached.

Gaurav Ratnaparkhi, Head of Technical Researchat Sharekhan said that Nifty50 traded near the swing lows seen in March & May this year. The March low of 15,671 has not been breached on a closing basis for the third consecutive session, he noted.

“Thus the potential for a short term bounce back remains intact. On the higher side, 15,800 is acting as a near term resistance for the Nifty50. If the index surpasses this barrier, it will be poised for a leap towards 16,000,” Ratnaparkhi said.

“However, a breach of the March low on a closing basis will negate this possibility. In that case, the index can slide down to 15,400 & subsequently to 15,100,” he added.

Mazhar Mohammad of Chartviewindia.in said it is important for the index to sustain above 15,659 to stem further breakdown.

In that scenario, he added that bulls can make an attempt to bridge the bearish gap present between 15,886 and 16,172 levels. If the index breaches the support, the next support is present at around 15,300 levels, Mohammad said.

For the day, the index closed at 15,692.15, down 39.95 points or 0.25 per cent.

Nagaraj Shetti of HDFC Securities said that the short term trend of Nifty50 continues to be weak. “The lack of strength at the important support suggests chances of false downside breakout or one leg of downside, before showing sharp upside bounce from the lows of around 15,500 levels in the short term. The immediate resistance is placed at 15,780,” he said.





Nifty Bank



Chandan

of Motilal Oswal Securities said Bank Nifty closed near its opening levels, thus forming a Doji-like candle on the daily scale. The index negated its lower lows formation of the last ten sessions, he said.

“Now, till Nifty50 holds below 33,750, weakness may be seen towards 33,000 and 32,500 whereas hurdles are placed at 33,750 and 34,000,” he added.





(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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