Tech View: Nifty forms Bearish Belt Hold; recent rally losing steam

NEW DELHI: Nifty50 fell for the second straight session on Friday and barely held above the 11,500 level. The index formed a Bearish Belt Hold on the daily chart and an indecisive Doji-like candle on the weekly chart.

Such formations after Nifty50 retraced 62 per cent of the fall from the highs of 11,794-11,185 hint that the recent rally is losing steam, said Mazhar Mohammad of Chartviewindia.in.

Mohammad said some meaningful supports are placed in the 11,334- 11,278 range on a closing basis. The analyst said the index needs to breach the 11,620 level for any sustainable rise.

For the day, Nifty closed at 11,504, down 11.15 points or 0.1 per cent. During the session, the index tested its near-term supports such as 20-EMA and the lower end of a rising channel, but closed above them.

Nagaraj Shetti of HDFC Securities said the index continued to stay above the support of 20-day EMA, but failed to show any significant upside bounce from there.

“A rangebound movement on the daily chart in the last 7-8 sessions has eventually resulted in a downside breakout. One needs to be cautious,” Shetti said.

Check out the candlestick formations in the latest trading sessions

Independent Analyst Manish Shah said traders may initiate long trades in the 11,610-11,650 range.

Sacchitanand Uttekar of Tradebulls Securities expects the 11,550 level to be a key pivotal for the coming week. “In case the 11,550 level is breached, there could be a sharp upswing towards 11,750 level. The 11,250 level looks unlikely as of now, as long as Nifty50 holds above 11,450," he said.

Mohammad advised traders to avoid long positions on the index. Positional shorting opportunities can be considered on any close below 11,500 on Nifty50, he said.