For the day, the index closed at 16,483.85, down 147.15 points or 0.88 per cent.
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan, said that the index had stepped into a short-term consolidation mode on Monday and witnessed a follow-through selling today.
“The hourly chart shows that the index is parting from an upper channel line on the downside, and on the way down, it has breached the key hourly moving averages. The hourly Bollinger Bands have started expansion, thus, making way for the index on the downside. Also, the Nifty50 has entered into a recent gap area on the daily chart and can move down further towards 15,360 to fill up the gap area,” Ratnaparkhi said.
This analyst saw immediate resistance for the index at 16,570-16,600.
Ruchit Jain, lead researcher at
5paisa.com, however, noted that one can still avoid shorts as the momentum readings have cooled-off from the overbought zone and any positive reaction to the Fed outcome can lead to a resumption of the positive momentum.
“The intraday volatility could remain high due to uncertainty and, hence, traders are advised to trade with proper risk management,” he said.
Mazhar Mohammad of Chartviewindia.in said that the index has not only closed below the 200-day EMA but has also partly bridged the bearish gap registered on July 20.
If the index fails to sustain above 16,359. The weakness can extend further towards 16,100 levels, he said.
“The follow-up action after a bearish pattern formation is necessary and, if it happens, will lead to a further fall on the downside towards 36,000-35700 levels. The immediate upside resistance stands at 36,600, and if breached, it can lead to fresh short covering towards 37,000 levels,” Shah said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)