Tech view: Nifty50 forms ‘Bearish Belt Hold’; a break below 8,730 could trigger correction

NEW DELHI: The Nifty50 slipped below its psychological support level at 8,750 on Wednesday and formed a ‘Bearish Belt Hold’ kind of pattern on the daily candlestick charts.

A ‘Bearish Belt Hold’ pattern is formed when the opening price becomes the highest point of the trading session (intraday high), which means there is no upper shadow and then the stock declines through the day, forming a large body and a small lower shadow.

In Wednesday’s session, the Nifty50 opened at 8,806, which was slightly below its intraday high of 8,806. It slipped over 75 points to touch its intraday low of 8,731, thus forming a short lower shadow. The index finally closed 25 points lower at 8,743.

The Nifty50 came under intense selling pressure as it failed to cross the key resistance levels at 8,800 and 8,820. Now, a break below 8,720 and 8,730 levels can trigger further downside for the market.

A ‘Bearish Belt Hold’ pattern formed after a ‘Doji’ signifies weakness in the market and calls for traders to tread with caution. This pattern often signals a reversal in investor sentiment from bullish to bearish, but traders should await further price action before making any decision.

“The Nifty50 formed a ‘Bearish Belt Hold’ kind of pattern on the daily candlestick charts, as selling pressure continued through the session right from the highest point of the day, where it had opened,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told ETMarkets.com.

“A bearish pattern after an indecisive Doji formation appears to be setting the stage for a correction in the near term. In the next trading session, if the Nifty50 slips and consistently trades below the 8,730 level at least for an hour, the bears will succeed in pushing the prices towards the 7,650-7,600 zone,” he said.

Mohammad said the Nifty upside will remain capped around the 8,800 level for the time being, unless the index sees a decisive breakout.



Earlier in the day, the Nifty50 opened on a positive note but failed to hold above the crucial resistance level at 8,800. It engulfed the price movement of the last session and negated the positive momentum of past three sessions.

“The Nifty50 index formed a ‘Bearish Belt Hold’ candle on the daily candlestick charts as it failed to surpass exhaustive multiple supply gap zone between 8,800 and 8,820 levels,” Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.

“It recovered from the lowest level seen in the last three sessions, but absence of any followup buying might pull the index on the lower side if it sees followup selling next session,” he said.

Taparia said if the index sustains below the 8,720 level, then selling pressure may emerge and drag the index towards 8,688, 8,600 and then 8,558 levels.