Nifty 50 opened on a negative note at 16,469.60, and slid to as low as 16,347.10 level. However, at lows, buying emerged to take the index to as high as 16,487.25. Eventually, it closed down 153.20 points or 0.92 per cent at 16,416.35.
“Technically, the pattern signals a weak trend with range bound action. Nifty is currently placed at the edge of breaking below the crucial support of 16,400 levels (support as per change in polarity and daily 10 and 20 day EMA). But minor buying is still emerging from the lows,” said Nagaraj Shetti, Technical Research Analyst,
Analysts said the market is waiting for the trigger from RBI’s mid quarter policy review meeting, which is expected to decide on monetary policy tomorrow. The negative outcome could trigger more weakness and any positive or status quo approach could bring bulls back into action.
The positive sequence like higher tops and bottoms is intact as per daily chart, analysts noted.
“The short-term trend of Nifty continues to be negative. Formation of small negative candles with lower shadows on the downside and placement of crucial supports, one may expect Nifty to witness sustainable upside bounce from the lows of 16300-16250 levels in the next 1-2 sessions,” said Shetti.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, feels It was yet another day of “boredom” for the markets as market participants are opting to be a bit cautious ahead of the RBI monetary policy slated in the forthcoming session.
Amid sluggishness, the Nifty has managed to successfully defend the key support of 16,400 on a closing basis and the way some of the banking heavyweights rebounded in the last few minutes of trade, was certainly a bit encouraging, said Chavan.
“In case of any favorable outcome from RBI, we may see Nifty reclaiming 16,600-16,700 levels; whereas on the flip side, any disappointment would lead to a breach of crucial supports placed around 16,400-16,300.”
Ruchit Jain, Lead Research,
5paisa.com, believes weakening market breadth is a negative sign for the short term. On the hourly chart, Nifty has resumed its ‘Lower Top Lower Bottom’ structure post the recent retracement move which indicates that the market has resumed its short-term downtrend, he added.
Jain suggests traders should avoid bottom fishing and consider any up move due to the event as just a pullback move and look to lighten up longs in such up moves.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)