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Tech View: Nifty50 forms bearish candle; outlook negative below 11,950-12,000

A small-bodied candle, a day after 'Doji' on the daily scale indicates lack of participation.

, ETMarkets.com|
Nov 18, 2019, 05.11 PM IST
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During the session, the index managed to defend its 13-day exponential moving average (DEMA) at 11,852.
NEW DELHI: NSE Nifty on Monday saw some selling pressure around the 11,950 level, but the bulls did not make any attempt to recover the lost ground. The index ended up forming a bearish candle on the daily chart. The bias for the index remains negative until it decisively breaches the 11,950-12,000 zone, said analysts.

A small-bodied candle, a day after 'Doji' on the daily scale indicates lack of participation.

The index has been trading in 11,785 -12,034 range for the past 13 sessions, said Chandan Taparia of Motilal Oswal Securities. “It needs to hold above 11,850 for any attempt to take out 11,950 and 12,000 levels,” he added.

For the day, the index closed at 11,894.25, down 1.20 points, or 0.01 per cent.

During the session, the index managed to defend its 13-day exponential moving average (DEMA) at 11,852.

Mazhar Mohammad of Chartviewindia.in expects the ongoing weakness to get accelerated once the bears decisively push the index below the said average. In such a scenario, a breach of recent corrective swing low of 11,802 levels looks inevitable. Any upside looks capped at 11,973, he said.

“The price action over the last few sessions suggests that the market is in a flux for the near term. The next leg of correction is likely, as long as the index trades below the near-term resistance zone of 11,973-12,000. This means that the last week’s low of 11,802 is likely to be breached,” said Gaurav Ratnaparkhi of Sharekhan.

Ratnaparkhi said that the current structure is developing as a Complex Correction as per the Elliott Wave Theory, and that the short-term momentum indicator is attempting to complete the correction cycle back to the equilibrium line.

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