The index has given a breakdown of the rising trend line and closed below 50-DMA, which suggests weakness in the next trading session, said Palak Kothari, Research Associate at Choice Broking. The market will be shut on Friday on account of Gurunanak Jayanti.
On Thursday, Nifty50 closed at 17,764.80, down 133.85 points or 0.75 per cent.
“A strong bearish candle is visible on the weekly charts, hinting that bears are in the driver’s seat for the time being. Hence, going forward it looks critical for the bulls to defend their 50-day EMA as close below this level can resume the downswing with deeper cuts, with initial targets placed around 17,000 levels. If the bulls manage to defend 17,688 on a closing basis, sideways consolidation is likely,” said Mazhar Mohammad of Chartviewindia.in.
Independent Analyst Manish Shah said the long term trend on the weekly chart is intact and one needs to wait for a reversal in the intermediate term decline. “Nifty50 needs to move above 18,100 and hold higher for the current decline to reverse. Markets could get dicey in the days to come. Trade carefully,” Shah added.
Meanwhile, Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research said if the index fails to reach and sustain the level of 17,800, it can witness the continuation of correction till the levels of 17,600. “Technical indicators suggest a volatile movement in the market in the 17,600-18,000 range,” he said.
