"If the bulls manage to keep the index above the 9,200, the lower end of the wedge, then a short-covering rally can take it back to 9,300-9,400 levels,” Agarwala said.
New Delhi: Nifty50 on Tuesday failed to capitalise on early gains and ended up forming a bearish candle on the daily chart. The follow-up selling after forming an Island Reversal pattern in the previous session confirmed weakness in the market, said analysts.
They see potential for the Nifty50 to test the 8,800-8,900 region in the near future. For the day, the index closed at 9,205, down 87.90 points, or 0.95 per cent.
“The Island Reversal pattern got confirmed with Tuesday’s negative close. The near-term oscillators continue in the ‘sell’ mode. The index could head towards the 8,800-9,000 region in the near term," said Arun Kumar, Market Strategist at Reliance Securities.
A sustained trade below the 9,200 mark in the coming session will trigger a breakdown of a Rising Wedge pattern, which could drag the index lower to 9,130-9,050 levels, said Aditya Agarwala at YES Securities.
"If the bulls manage to keep the index above the 9,200, the lower end of the wedge, then a short-covering rally can take it back to 9,300-9,400 levels,” Agarwala said.
Daily strength indicator RSI and momentum indicator Stochastic have turned bearish along with a negative crossover, indicating a negative bias ahead.
“With the current close, Nifty is approaching the intraday support zone in the 9,180-9,160 area. However, any violation of this zone will cause further weakness and take Nifty towards the 9,120-9,050 zone,” said Rajesh Palviya of Axis Securities.
