NEW DELHI: Nifty50 on Wednesday slipped below its 50-day exponential moving average (EMA) and also its 10-week to close at around 14,550 level. The index formed a bearish candle on the daily chart and negated the higher lows after three straight days. Analysts see weakness ahead.
Nagaraj Shetti of HDFC Securities said the formation of the High Wave-type candle pattern of Tuesday has turned out to be a reversal pattern, as of now.
“This is a negative indication and signals more downside in the coming sessions. Nifty50 is expected to revisit the lower gap support at the 14,350 level in the short term, as it fell below the crucial weekly 10-period EMA of placed at 14,580,” Shetti said, adding that the EMA had in the past had offered good support for the market.
“Nifty not finding support of this moving average this time could mean a chances of broad-based weakness beginning in the market,” the analyst said.
ETMarkets.comFor the day, the index closed at 14,549, down 265.35 points or 1.79 per cent.
Aditya Agarwala of YES Securities believes a sustained trade below 14,550 in Thursday’s session could extend the corrections to the 14,460-14,350 zone.
“The bulls need to make sure that they take Nifty50 back above 14,675-14,700 zone for short coverings to play out to 14,900 level,” he said.
Sameet Chavan of Angel Broking remained cautious and advised traders against creating aggressive bets for a while.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com“Nifty seems to be moving in a descending channel for the last 25 days after hitting the high of 15,431 levels on February 16, whose support for next session is placed around 14,430 level. It is critical for the index to sustain above the 14,450–430 zone. A failure to sustain it may rag Nifty to the swing low of 14,350,” said Mazhar Mohammad of Chartviewindia.in.
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