Tech View: Nifty confirms failed breakout, bears in driving seat

Nifty 50 fell for the second consecutive day on Monday and turned a bearish candle on the daily chart. This happened after a bearish engulfing pattern formed on Friday. Analysts said the index slipped below a falling trend line, indicating a failed breakout. They see further weakness.

The long bear candle formed on the daily chart confirmed a false upside breakout of the important overhead resistance of the down sloping trend line at 17,900 level, said Nagraj Shetty, Technical Research Analyst.

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“The long bear candle of the last two sessions indicates a sharp decline in the last 5-6 sessions. This is a negative sign and an indication that the bears are in the driver’s seat,” he added.



The index for the day closed at 17,490.70, down 267.75 points or 1.51 per cent.

A fall below 17,400 could bring further correction in Nifty 50, says senior technical analyst Rupak Dey

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Day said, “The lower end support is seen at 17,200-17,000. On the other hand, if Nifty does not fall below 17,700, then it can reach the level of 17,700.

Gaurav Ratnaparkhi of Sharekhan said Nifty 50 formed a Shooting Star candlestick pattern on the weekly chart of last week. Moreover, on the daily chart, the index witnessed some bearish developments on 19th August. “Thus, a follow-up was observed today. In the last week, the index crossed a descending trendline, however, it could not sustain. In the higher zone and today has fallen below the trendline. This shows that The bears currently have the upper hand. Short-term momentum indicators are also in favor of the bears,” Ratnaparkhi said.

This analyst is seeing a decline in Nifty 50 towards 17,300 and 17,000. On the other hand, 17,700-17,750 will act as a near barrier zone, he said.

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Nifty Bank formed a bearish candle on the daily scale and strongly respected the 38,250 level at various times during the day, said the Securities Exchange of India.

“To move towards 38,750 and 38,888 zones, it needs to be held above 38,250, while support is placed at 38,000 and 37,750 zones,” he said.


(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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