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During the day, the 50-Pack Index could not sustain its key support levels as it entered the oversold area suggested by the 14-day Relative Strength Index. While the trend remains broadly positive, some upside is likely to be followed by a sharp decline.
Milan Vaishnav, Founder and Technical Analyst Gems Equity ResearchSaid engulfing candles are generally bearish, but in the present case, a bearish engulfing candle has formed after a bearish break.
Vaishnav said, “This suggests that this could be the last sinking candle, and a possible bottom and a reversal formation may soon be formed. We believe this bearish candle to be headed.” should not trade indiscriminately on the downside.”
“The RSI Shows a strong bullish divergence against the price. The best way to handle the current trade setup is to use the downsides to choose stocks with strong relative strength. Shorts should be avoided as short traps can occur, especially when the market looks towards an imminent technical pullback,” he said.
For the day, the index closed 331.55 points or 2.11 per cent lower at 15,360.60.
Mazhar Mohamed of chartviewindia.in said the only consolation for the bulls at this point of time is that the index hit the lower boundary of the 3-month old downsloping channel with a low of 15,335 after the fall.
“Therefore, some consolidation and pause in the downside can be expected around the current levels. Nevertheless, as the larger trend is down, if Nifty moves below 15,344 levels, the weakness will extend to 15,055 levels. Meanwhile, the uptrend, if any, will be limited around 15,890 levels,” Mohamed said.
Gaurav Ratnaparkhi of Sharekhan said the index opened in the resistance zone of 15,800-15,900 but failed to cross the upper edge.
The index eventually broke the March low of 15,671 decisively. “Structurally, the index is poised to test the downside 15,100-15,000. On the other hand, 15,670-15,700 will now act as a resistance zone in the near term,” he said.
Nifty Bank
Sandalwood
of Motilal Oswal Securities Said the index failed to cross the crucial hurdle of 33,750 and later declined towards the 32,500 level.
Taparia said, “It formed a major bearish candle on a daily scale and broke its immediate weekly support area. Now, weakness can be seen in the 32,250 and 32,000 areas as long as it is not below 33,000, while Barriers have been placed in areas 33,000 and 33,333.”
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent whose views) economic times,
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