Nifty Analysis: Tech View: Nifty50 forms a bearish candle; 50-DMA may offer support

NEW DELHI: Nifty declined for the third straight session on Tuesday and formed a bearish candle on the daily chart. During the day, the index broke below its 20-day moving average. Analysts said market is likely to see sideways action now, but any failure to stage a recovery from here on could potentially send the Nifty tumbling towards the 14,720 level, which is near Nifty’s 50-day simple moving average.

Mazhar Mohammad of Chartviewindia.in said the index could trade sideways to positive, provided the bulls manage to pull off a close above 15,000 level.

“For the time being, intraday traders are advised to create short positions below the 14,890 level and look for a modest target of 14,750 level,” he said.

For the day, Nifty closed at 14,910, down 19.05 points or 0.13 per cent. On the hourly chart, Nifty is in the process of recovering from the recent fall and the rise is subdividing into lower degree waves.

From a trading perspective, buy on dips should be the preferred strategy for the short term on any reversal below the swing low of 14,745. “On the higher side, the 15,000-15,050 zone will continue to act as a key hurdle beyond which the index will be poised for a descent upside,” said Gaurav Ratnaparkhi of Sharekhan.

Check out the candlestick formations in the latest trading sessions

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“Technical factors are aligned to support a lacklustre market movement going forward,” said Ashis Biswas of CapitalVia Global Research.

“Any corrective wave should find support around the 14,750 mark. As such, traders are advised to refrain from building fresh buying position until we witness a correction till 14,750 level,” he said.