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Updated on June 1, 2023 10:05 pm

nifty50: Tech View: Nifty50 sees selling at high; consolidation may continue

New Delhi: Nifty50 on Tuesday saw selling pressure as soon as it kissed the 16,000 mark. The index eroded entire intraday gains to eventually form a bearish candle on the daily chart, with a long upper wick, reflecting weakness at high. Analysts said the ongoing consolidation for the index may continue, with levels of 15,650-750 likely to offer some support to the index.

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan, said that the 16,000 mark is a key barrier from the short term perspective.

He noted that the index could sustain above a falling trendline on the hourly chart, which indicates exhaustion of the short-term positive momentum. The immediate support for the index is near 15,750-15,800. Overall structure shows that the Nifty50 is still in short term consolidation mode, he said.

For the day, the index closed at 15,810.85, down 24.50 points or 0.15 per cent.

Mazhar Mohammad of said that the day’s chart depicted a shooting star-like candle with a long upper shadow. Tuesday’s selling, according to him, has come from a massive supply zone present in 15,900-16,172 range.

“If the index slips below 15,661, it may signal the end of the pullback rally that is in place from the low of 15,183. In that scenario, initial targets can be towards 15,511. Contrary to this, if the index manages to defend 15,785, the bulls can make an attempt to bridge the bearish gap with a close above 16,172 level,” he said while advising traders to avoid long side bets for now.

Shrikant Chouhan of Kotak Securities said that the 20-day simple moving average (SMA) or 15,750 would be the key support level now. Below the same, the index could slip to 15,700-15,650 levels, he warned.

Nifty Bank

Independent Analyst Manish Shah said Bank Nifty found sellers at the falling trendline, from April highs to June. The pattern in play is a bearish Dark Cloud Cover, he said.

“Expect a drop towards 33,100 if Nifty bank trades below 33,700. Overall, it may trade in the range of 33,400-33,100. For Nifty Bank to rally, it needs a move above 33,400-33,450, which will result in a rally too, 35,900-36,000. The current expectation is that it will continue to oscillate between 33,100-34,000 for a prolonged period,” Shah said.

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


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