Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said that the index faced selling on breaching the 20-hour moving average, but it received some support at the 18,050 level.
“The daily chart shows that the index has tested a rising trendline on the downside from where it bounced to some extent towards the end of the session. Nifty50 is trading near its short term support, which can either lead to a minor degree bounce or a sideways action. The downside looks protected at 18,000. On the other hand, 18,400-18,500 will be the hurdle zone for a minor degree bounce,” Ratnaparkhi said.
For the day, the index closed at 18,178.10, down 88.50 points or 0.48 per cent.
“Nifty50 registered a ‘Three Black Crows’ like bearish formation, though in a perfect pattern the second and third day of bearish candles open around the midpoint of the preceding sessions and in this case the second day candle slightly failed to meet that condition. That said, Nifty50 appears to have found some support around 18,050 as it entered into the bullish gap zone of 18,050-18,008 levels registered on October 13. Moreover, it recovered 130 points from intraday low validating the support present in the said gap area,” said Mazhar Mohammad of Chartviewindia.in.
Mohammad said if the index breaches 18,040 level on Friday, the chance of it heading towards its 20-day moving average of 17,950 remains high.
“We are in a fast-moving market as Directional Movement shows a bullish sentiment. MACD has moved into a sell mode. Usually, corrective decline lasts 2-3 days before the market reverses and resumes its original direction, which in this case is up. We reiterate that Nifty is in a strong trend. We need Nifty50 to move above 18300 for a rally to 18,900-18,950,” said Independent Analyst Manish Shah.
