Tech View: If Nifty50 slips below 15,700, it may give the bears an upper hand

NEW DELHI: Nifty50 on Tuesday formed a bearish candle on the daily chart and negated the formation of higher lows that it was making for the past three sessions. The index ended near its 20-day simple moving average. Analysts said holding above the 15,700 level is a must for the index to avoid a correction. The key resistance at 15,900 level will continue to pose as near-term hurdle, they said.

For the day, Nifty closed at 15,748, down 66.25 points or 0.42 per cent.

A Nifty50 close below 15,700 level will be considered as the initial sign of weakness, said Mazhar Mohammad of Chartviewindia.in.

“If the bulls manage to defend the 15,700 level on a closing basis on Wednesday, chances of a breakout above 15,900 level will arise. In that scenario, a higher target would be present in the zone between 16,100 and 16,300 levels.

“The index has seen a close below 21-hour moving average, which is slightly negative,” said Sumeet Bagadia of Choice Broking. The momentum indicators 14-day RSI and MACD are suggesting a negative crossover on the daily timeframe, he said.

“The daily Bollinger Bands have contracted further and the index has reached its 20-DMA. A minor degree dip last week found support near this key short-term moving average and the same is expected this time as well. The swing low of 15,673 will be the subsequent near-term support. On the other hand, the swing high of 15915 will be the key barrier to watch out for,” said Gaurav Ratnaparkhi at Sharekhan.

He said the overall structure shows the ongoing consolidation is an opportunity for the positional traders to get aligned with the larger uptrend.