The day’s move did break the ongoing bullish sequence, which had been running firm for last six sessions, where the index never slipped below its previous day’s swing low. A consolidation phase looks on the cards, they said.
The index formed a Bearish Engulfing candle on the daily chart. Arun Kumar of Reliance Securities said this pattern usually indicates a change in trend ‘from bullish to bearish or a consolidation’.
“A negative close on Thursday will confirm this pattern. The immediate support for Nifty50 stood at 10,050. A breach of this level on a closing basis could lead to more fall,” Kumar said.
The chart candle had its tail placed at its key support level at 10,281 which also coincided with its five-day EMA level at 10,272, said Sacchitanand Uttekar of Tradebulls Securities.
“With most of its momentum indicators placed in close proximity to their respective overbought zone, and the absolute price action on the daily scale showing signs of reversal, it would be ideal to refrain from building any leveraged long positions,” Uttekar said.
Check out the candlestick formations in the latest trading sessions
For the day, Nifty closed at 10,305, down 165 points or 1.58 per cent.
“The RSI indicator turned southward after making a double top at 70 level, suggesting a temporary pause in the index before it resumes its uptrend,” said Aditya Agarwala of YES Securities
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