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Tech view: Nifty forms large bearish candle as selling pressure intensifies

A breach of the long-term average at 11,140 level showed market participants were fearful.

, ETMarkets.com|
Jul 30, 2019, 05.18 PM IST
0Comments
BCCL
Nifty---BCCL-1200
Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral and avoid initiating positional shorts.
NEW DELHI: Nifty50 slipped below the crucial support at 11,100 level on a closing basis on Tuesday and formed a large bearish candle on the daily chart. The index broke below its 200-day moving average, as selling pressure intensified.

A breach of the long-term average at 11,140 level showed market participants were fearful, so much so that they did not respect the level even on a closing basis, said Shrikant Chouhan of Kotak Securities.

The technical setup remained weak. “If the index fails to reclaim the 11,250 level soon, it may drift towards the next psychological support at 11,000 and then 10950,” said Chandan Taparia of Motilal Oswal Securities.

For the day, the index fell 103.80 points, or 0.93 per cent, to 11,085. It breached the May low of 11,108, suggesting that the structure has leaned in favour of the bears from a medium-term perspective, said Gaurav Ratnaparkhi of Sharekhan.

Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral and avoid initiating positional shorts. Nifty may post a temporary bottom around the 10,850 level in the next few sessions, he said.

This shall eventually lead to a sustainable pullback. “Intraday shorting can be considered below the 11,072 level for targets close to 10,900. On the upside, strength shall not be expected unless Nifty closes above 11,290,” Mohammad said.

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A significant majority of Nifty 500 stocks in the red

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