Tech view: Nifty50 forms Bearish Belt Hold, is in a strong downtrend

NEW DELHI: The Nifty50 shed 2.39 per cent, or 259 points, to close Thursda y’s session at 10,599. It had broken below its crucial 200-day moving average right at the gap-down opening, a level that proved to be the day’s high. The index ended the session forming a ‘Bearish Belt Hold’ on the daily charts.

The index could not even close above 10,600 level, as the bears took over the market. Further weakness is likely to push Nifty to 10,500 and even 10,350 levels.

Its immediate support is at 10,550, which is unlikely to hold for long, said Nagaraj Shetti of HDFC Securities.


For the day, the 50-pack index settled 259 points, or 2.39 per cent, down at 10,599.

“Nifty has broken its 50 per cent retracement of 10,850 and 61.80 per cent retracement of 10,650 of the entire upswing from 9,952 to 11,760. It also slipped below its rising trend line on the weekly scale by connecting the swing lows of 7,893, 9,952 and 10,850,” said Chandan Taparia of Motilal Oswal Securities.

At Thursday’s low of 10,547, Nifty50 washed out the entire rally from the lows of 10,557, registered in June 2018, to a high of 11,760 that it had reached in 41 sessions.

“This kind of faster retracement on the downside, which took only 24 sessions, confirms the fact that the market is in a strong downtrend. Once this low of 10,550 is decisively breached, the next logical support can be expected at 10,300 level,” said Mazhar Mohammad of Chartviewindia.in.

A halt at Thursday’s low of 10,550 may trigger a corrective wave upmove ‘B’ within the corrective wave structure A, B and C, said Aditya Agarwala, Technical Analyst, YES Securities.