A gap-up start to the session at 14,247 proved the day’s high, as the index ended the day forming a ‘Bearish Belt Hold’ candle on the daily chart. Such a pattern reflects selling at the word go and, following indecisive candles, it is seen as a negative formation.
Analysts, however, say as long as the 13,950 level remains secured, chances of Nifty’s recovery are strong. For the day, the index closed at 14,137, down 8.90 points, or 0.06 per cent.
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“The back-to-back negative closings appeared to have damaged the strong upward momentum. In the next session, if Nifty50 slips below the 14,120 level, the weakness shall get extended up to the 14,000 level. That said, the trend reversal in favour of the bears shall not be considered, unless Nifty closes below the 13,950 level. On the upside, strength should not be presumed unless Nifty sees a strong close above 14,250 level,” said Mazhar Mohammad of Chartviewindia.in.
He said the index is in a consolidation phase and advised traders to remain neutral until it witnesses a fresh breakout.
Aditya Agarwala of YES Securities said the RSI has formed a negative divergence on the daily time frame, suggesting a weakening uptrend.
That said, Nifty50 continued to form higher high for the 11th session, said Chandan Taparia of Motilal Oswal Securities. “It has to hold above the 14,000-14050 zone to witness a fresh move towards the 14,250 level. Major supports exist at 14,000 and 13,900 levels,” he said.