Friday saw the NSE barometer with a gap-down start, negating its higher high-low formation after five sessions. While it ended up forming a small bullish candle on the daily scale, a formation of ‘Shooting Star’ like candle on the weekly chart does not bode well for the bulls, said analysts.
Unless Nifty50 bridges Friday’s bearish gap zone of 16,509-535 level, the trajectory of the market shall remain on the downside, said Mazhar Mohammad of Chartviewindia.in.
“If the bulls fail to defend 16,376 level, weakness will initially get extended towards the zone of 16,200-162 range. If defended, they can make an attempt to bridge the bearish gap, but such a rally towards 16,500 may remain vulnerable to selloffs,” Mohammad said.
For the day, the index closed at 16,450.50, down 118.35 points or 0.71 per
“Nifty50 formed a Shooting Star candlestick pattern, which is a bearish sign. While Nifty50 has been outperforming major developed and emerging market indices, a Shooting Star candle hints at a mild retracement towards the short-term averages. There could be a dip to 16,150. We suggest traders remain watchful as any break below the same might lead to weakness in the short term,” Samco Securities said in a note.
Gaurav Ratnaparkhi of Sharekhan said, during the day, the index found intraday support near the 61.8 per cent retracement of the last leg of the rally.
“This key Fibonacci level nearly coincided with the upper end of the previous brief consolidation at 16,350. So, 16,350 is a key short-term support to watch out for, where the index can form a base for itself. The overall structure shows that this is a short-term consolidation, which can take place near 16,350-16,700 over the next few sessions. The medium-term outlook, however, continues to be positive,” he said.
