Monday’s session turned out to be a tepid one for Dalal Street, as the benchmark Nifty50 faced heavy selling pressure at its intraday high of 11,981. The index eventually settled at 11,936 after opening at 11,939.
During the process, the index formed a Doji candle on the daily chart with a negative advance-decline ratio, suggesting continuation of selling pressure in the broader market. Momentum indicator MACD stayed in ‘sell’ mode.
“If Nifty50 declines below 11,888 level next session, then it can slide towards its 50-day simple moving average at 11,740,” said Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory, Chartviewindia.
Technically, the market has managed to survive above the lowest mark of the previous session, but failed to hold at higher levels.
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, said the current technical structure suggests the attempt to take out the double-top resistance has failed and Nifty will continue to face resistance at higher levels.
“The index has slipped below the short-term 20-DMA level, which currently stands at 11,980. This level will continue to pose resistance to Nifty on a closing basis. Nifty is likely to see a rangebound session with a negative bias at higher levels on Tuesday,” he said.
Mohammad said positional traders can continue with their short positions for a target of 11,740, whereas intraday traders can consider shorting the index afresh if it trades below 11,888 for at least 30 minutes in Tuesday’s session.
Source: Economic Times