Nifty: Tech view: Three Black Crows on Nifty charts means bears holding fort

NEW DELHI: The Nity50 on Wednesday declined for the third straight session to settle below the crucial support at 11,250 level. The index formed a candle similar to Three Black Crows, a bearish pattern, on the daily chart, and the index is now bracing for the 11,171 level.

The formation of Three Black Crows candle and lower highs and lower lows on the daily chart indicates that the bears are having a tight grip on the market, said Chandan Taparia of Motilal Oswal Securities, who believes the index may drift towards the previous swing high of 11,171 soon.

For the day, the index declined 44.55 points, or 0.39 per cent, to 11,234.

“This selling pressure was observed from the 50-DMA (11,336) level, which would now act as a crucial resistance going ahead. The Nifty50 has marked the day’s low at 11,210 around the bullish gap area of 11,210-11,185 created in July, which is likely to remain its immediate support zone,” said Rajesh Palviya of Axis Securities.

“Any pullback rally from the support zone can’t be ruled out. Any sustainable move above 11,260 will trigger an intraday bounce towards 11,300 and 11,330 levels. The violation of the 11,210 level will cause further correction towards 11,180 and 11,150 levels,” he said.

The internal structure of the recent leg of fall is developing as an impulse, said Gaurav Ratnaparkhi of Sharekhan.

“This adds weight to evidence in favour of the bears. On the downside, the 11160 level shall be key to watch out for. On the other hand, a near-term hurdle is seen in the 11,270-11,300 zone,” Ratnaparkhi said.

Daily strength indicator RSI and momentum indicator Stochastic both were in the negative zone.

Mazhar Mohammad of though believes positional traders can initiate fresh longs as the Nifty50 trades in the 11,100-11,000 zone.

Source link


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar