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The formation of reversal and the bearish candlestick pattern could signal more weakness towards 13,765 levels in the next few sessions, says Nagaraj Shetti of HDFC Securities. Sunil Shankar Matkar January 27, 2021 / 10:49 PM IST
The Nifty50 ended in the red for the fourth consecutive session and lost nearly 2 percent on January 27 on across-the-board selling, except FMCG sector, ahead of the expiry of current month s futures & options (F&O) contracts on January 28.
The S&P BSE Sensex plunged 937.66 points or 1.94 percent to 47,409.93, while the Nifty50 fell 271.40 points or 1.91 percent to 13,967.50 and formed a Bearish Belt Hold pattern on the daily charts.
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Nifty opened gap down on Wednesday and selling pressure dragged the index below the psychologically important 14,000 mark. The index slipped and touched an intraday low of 13,929 level and eventually closed at 13,967 with a loss of 271 points. The index continued to form lower top and bottom for the third straight session. Nifty also formed a Bearish Belt Hold sort of candle, indicating that the bears had complete control over the market through the session.
Nifty may continue to remain highly volatile ahead of Thursday’s monthly F&O expiry and next week’s Union Budget. Now, as long as Nifty remains below 14,200 level, every bounce can be sold into and weakness may be seen towards 13,800 level, while on the upside key hurdle exists at 14,200 and 14,350 levels.
NEW DELHI: NSE Nifty and its BSE counterpart Sensex both shed nearly 2 percent as the broader market saw a sell-off led by bank and financial stocks. The 50-pack Nifty formed a long bearish candle on the daily chart as the index continued its losing streak for the fourth consecutive session.
On the technical front, Shrikant Chouhan of Kotak Securities said, the Nifty50 has taken support at 13,950 level and it is possible that the index may give a healthy bounceback to 14,400-14,500 ahead of the Budget or the day of the Budget.
“Indian bourses mirrored mixed sentiment from global peers with a downward rally owing to consecutive days of FII selling. Barring the defensive FMCG segment, all sectors traded in the red zone, with banking and pharma stocks being the worst hit. The global markets were mixed today ahead of the US Fed meeting amid uncertainty over the US stimulus. We should expect higher volatility in the coming days given pre-Budget event risk, said Vinod Nair, Head of Re
Tech View: Nifty forms Bearish Belt Hold, tests the crucial 34-day EMA
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Analysts said the index tested its 34-day exponential moving average (EMA) during the session and hit an intraday low of 13,929. This level can now prove to be a crucial support for Nifty, followed by the 13,765 mark, they said.
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“The importance of 34-EMA stems from the fact that Nifty tested and consolidated around the said average for three sessions in October 2020, before resuming its rally from the low of 11,535 level, said Mazhar Mohammad of Chartviewindia.in.
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NEW DELHI: Nifty50 on Wednesday slipped below the 14,000 mark, as it formed a Bearish Belt Hold candle on the daily chart. Such a candle is formed when the day s open becomes the day s high point and the index sees selling through the rest of the session, reflecting bear domination.