The daily chart pattern resembled an ‘Island Reversal’ pattern, a formation that does not bode well for the bulls.
NEW DELHI: A global selloff on Monday sent Nifty reeling below the 9,300 level on a closing basis. The opening level proved to be the intraday high for the index, as selling intensified from the word go. The daily chart pattern resembled an ‘Island Reversal’ pattern, a formation that does not bode well for the bulls.
With Monday’s close, the index has decisively broken below its support at 9,560 formed by the upward-sloping trendline seen in last five weeks, and this has signalled a short-term trend reversal.
“If Nifty breaks the 9,260 level, it may retest the earlier support zone at 9,140, 9,100 levels. On the upside, the 9,350 mark will act as a key resistance and any violation of this level may trigger a pullback rally towards the 9,400-9,460 zone,” said Rajesh Palviya of Axis Securities.
For the day, the index fell 566.40 points, or 5.74 per cent, to 9,293 level.
Check out the Long Black candles formed in the latest trading sessions “The pace with which the market has fallen with a huge bearish gap present in the 9,731-9,533 zone hinted that a possible intermediate top is in place. The index should remain under pressure unless it closes above 9,732 level,” said Mazhar Mohammad of Chartviewindia.in.
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Arun Kumar, Market Strategist, at said some of the near-term indicators have slipped into the ‘sell’ territory. “Any follow-through weakness on Tuesday could lead to Nifty’s fall towards 8,800-9,000 zone,” he said.
Strength indicator RSI and momentum indicator Stochastic have turned bearish, along with a negative crossover, signalling a negative bias. Mohammad expects some support for the index at 9,250 level. A breach of this minor support shall drag Nifty towards 8,900 level, he said.
