Tech View: Nifty forms ‘Bearish Belt Hold’ pattern; may remain sideways
NEW DELHI: The Nifty50 snapped a four-day losing streak on Thursday. The NSE barometer formed a 'Bearish Belt Hold' pattern on the daily chart, as its opening level proved its intraday high. The index may trade sideways for some time, and only a sustainable move above 10,860 level may show initial sign of strength.
The price action is pointing out the sideways nature of the index, inside a Triangular formation, which appears to be in the last leg of its culmination, said Mazhar Mohammad of Chartviewindia.in. It looks prudent for traders to remain on the sidelines, he said.
Arun Kumar of Reliance Securities advised traders to stay on the sidelines but warned of a fresh round of selling should the index close below its 200-DMA placed at 10,799 level.
For the day, the index fell 33.55 points, or 0.31 per cent, to 10,821. This was the second consecutive session when Nifty faced stiff resistance from its 100-day SMA at 10,861.
“This resistance also coincides with past three weeks down sloping trendline hurdle at 10,860. Hence, any decisive breakout above this level will signal further strength. On the downside, immediate support will be in the 10,800-10,750 zone,” said Rajesh Palviya, of Axis Securities.
Nagaraj Shetti of HDFC Securities said the trading range is getting narrower and a move above 10,900 or below 10,750 level could trigger a sharp momentum on either side
So far, both strength indicator RSI and the momentum indicator Stochastic are in bullish mode.