Tech View: Nifty forms ‘Bearish Belt Hold’; bears in full control
It formed a ‘Doji’ on the weekly chart for a third consecutive week.
For the day, Nifty closed 54 points, or 0.45 per cent, down at 11,914.40. The index shuttled between an intraday high and low of 11,968 and 11883.50, respectively.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia said: “This chart formation is clearly suggesting that the market is on a pause mode for the time being and looks like in a range of 12,035-11,800. However, as it is holding on to its 13-day exponential moving average (11,899), breach of this on a closing basis will accentuate selling pressure further with initial target of 11,802.”
Rajesh Palviya, Head-Technical and Derivatives, Axis Securities said, “The chart pattern suggests that if Nifty crosses and sustains above 12,035 level it would witness fresh buying action which would lead the index towards 12,100-12,150 levels, while if index breaks below 11,800 level it would witness selling, which would take the index towards 11,700-11,620.”
At present, the 50-share index is trading above its 20, 50, 100, and 200-day simple moving averages (SMA), indicating positive bias in the short term.
“Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy,” Palviya said.
The weekly strength indicator RSI moved upwards and was above its reference line indicating positive bias. However momentum oscillator Stochastic turned negative from the overbought zone, indicating a possible consolidation or a corrective move in the near term.