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Tech View: Nifty respects key support, but momentum turns bearish

NEW DELHI: Nifty50 on Tuesday fell for the third straight session but somehow managed to close above the immediate support range of 15,630-15,600. Analysts said a fall below this range can open up the doors for the index to hit the 15,450 level. They see the immediate hurdle for Nifty50 at 15,730.

For the day, Nifty closed at 15,632, down 120 points or 0.76 per cent, and formed a bearish candle on the daily chart. It fell 1.07 per cent in Monday’s trade and closed almost flat on Friday. This is in sharp contrast to analyst expectations of the index hitting the 16,000 mark this week.

“The force with which the market is falling in the last three sessions might have altered the medium-term trend, which will be confirmed if Nifty50 closes below the 15,450 level. If the bulls manage to defend the 15,600 level on Thursday, some stability may emerge. The index’s initial hurdle can be around 15,728 level,” said Mazhar Mohammad of Chartviewindia.in.

Gaurav Ratnaparkhi of Sharekhan said the index broke certain key short-term support levels during the day such as a couple of swing lows and a rising trendline.

“The index went below the junction of the 40-day EMA and the daily lower Bollinger Band on an intraday basis, but recovered some ground to close right at the junction. The daily momentum indicator has turned bearish. This shows the Nifty is under pressure and is likely to trade sideways in the short term. On the downside, the June low of 15,450 will act as the subsequent support. Thus, the short-term range for Nifty will be 15450-15900,” he said.

Independent analyst Manish Shah said the index hit the rising 50-period moving average during the day and reversed. It also hit the support at 15,600 and reversed, he said.

He said Nifty is making a low every 7-8 trading days from the previous low. “Today was the seventh day from the low on July 9. There is a rhythm in the high-to-high cycle. We may see one more day of a decline after which Nifty50 should head back towards 15,900-15,950 range in the next 3-4 trading days,” he said.

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