Nifty Forms Bearish Belt Hold, But Looks Set For A Pullback
On Monday, experts claimed that the Nifty50 declined for the fourth consecutive session. It was observed that during the four-day, 223-point drop and the index slipped below its 100-day moving average. On the other hand, it is said that index held on to its broader 10,300-10,630 range. The experts also informed that the breakdown below the moving average inside a wide consolidation range has less significance. This is because it often tends to whipsaw without providing clear signals according to analysts.
On the other side, the 10,300 level would be seen as crucial support. It is expected that the breach below this important junction would extend the ongoing corrective move towards the ‘200-day SMA’ placed at around 10,140. For 6th of March, the index fell down 0.95 percent to close just above the 10,350 mark. It also formed a ‘Bearish Belt Hold’ pattern on the daily charts.
According to the analysts, the stability of the market is hinting at a pullback, maybe towards the upper end of the consolidation range. This is positioned approximately 10,630. Both the bulls and the bears will have an equal balance of power inside the consolidation phases till the range gets broken on either direction,” said Mazhar Mohammad of Chartviewindia.in.
Chandan Taparia of Motilal Oswal Securities said the index has hit its lowest daily close in 51 sessions since December 18.
The Nifty50 has been consolidating between 10,276 and 10,637 levels from last 18 sessions and has formed a contradictory pattern. Which is generally a sign of sideways momentum with limited upside,” Tapria said. On the other side, it is said that till the time index will remain below the 10,430 level, so the weakness might take it towards the recent swing low of 10,276 levels. On the upside, hurdles are seen at 10,430 and 10,525 levels,” the expert said.
On Monday, the benchmark indices traded lower for the fourth straight session following weak sentiment in Asia markets. Also, in opening trade against the previous session’s closing, the BSE Sensex fell over 200 points. It was noted that the broader Nifty also traded below 10,400 levels. As per the experts and analysts, the Indian rupee strengthened against the US dollar, by tracking gains in its Asian peers. However, earlier this week it was observed for the second straight session that the domestic equity indices gained to hit. A three-week high on upbeat global cues and bargain hunting in select index majors.
Domestic investors seemed to stay positive before this week as some of the important macro numbers were released. The numbers like GDP numbers for December quarter as well as the fiscal deficit and manufacturing data were released recently. On last Monday, the experts claimed that the Nifty50 closed 92 points, or 0.87 percent, up at 10,583, while the 30-share Sensex settled 304 points, or 0.89 percent, up at 34,446. Since February 5, 2018, both the indices hit their respective highest levels.