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Tech View: Nifty breaks rising channel support, signals weakening of uptrend

Nifty50 has broken the rising channel support line, suggesting weakening of the uptrend.

, ETMarkets.com|
Apr 04, 2019, 05.11 PM IST
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Mazhar Mohammad advised aggressive traders to go short on Nifty50 with a stop loss above 11,662.
NEW DELHI: Nifty50 on Thursday witnessed selling pressure from the word go. Buying emerged at the day’s low point, but it failed to push the index above the 10,600 level. It formed a bearish candle on the daily chart. Analysts said the support range of 11,570-40 would needs to be watched keenly.

Nifty50 has broken the rising channel support line, suggesting weakening of the uptrend, said Aditya Agarwala of YES Securities. “A sustained trade below 11,540 level can extend the correction to 11,480-11,405 levels. However, a sustained trade above 11,660 can resume the upward move and taking Nifty higher to 11,760 and 11,800 levels.”

For the day, Nifty fell 45.95 points, or 0.39 per cent, to 11,598, which was lower than its five-day exponential moving average.

Arun Kumar of Reliance Securities said the index has confirmed Wednesday’s Bearish Engulfing pattern with Thursday’s negative close. “Most of the near-term oscillators are in the sell mode and the evolving price setup indicates corrective action. The index may find support around the 11,570 level and subsequently around 11,500 level,” he said.

Chandan Taparia of Motilal Oswal said the ongoing momentum has halted. “Nifty has seen a negative divergence with its RSI indicator, as the index recently made two swing highs at 11,572 and 11,761, with the RSI indicator hitting 80 and 75 marks, which indicate some sort of pause in the positive momentum at higher levels.”

Mazhar Mohammad of Chartviewindia.in advised aggressive traders to go short on Nifty50 with a stop loss above 11,662 level on a closing basis and look for a target of 11,311.
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