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Tech View: Nifty negates Hammer pattern; Vix climbs to extreme high

For the day, the index fell 414 points, or 3.56 per cent, to 11,219.

, ETMarkets.com|
Last Updated: Mar 02, 2020, 04.02 PM IST
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Reuters
Stock prices are reflected in a glass wall as traders take a break at the Philippine Stock Exchange in Manila's Makati financial district
This was the sixth day of consecutive fall for the index.
NEW DELHI: Nifty on Friday cracked over 400 points to test the 11,200 level. The index formed a Bearish Candle on the daily chart and completely negated previous session’s Hammer pattern, shattering hopes of an early recovery.

On the weekly scale, the index formed a bearish candle. Analysts said the 11,000 level is now a possibility for Nifty.

For the day, the index fell 414 points, or 3.56 per cent, to 11,219. This was the sixth day of consecutive fall for the index. During this fall, the NSE barometer has lost about 900 points.

“The positive movement created by the formation of Hammer and a positive divergence on RSI on February 27 was negated completely in Friday’s session. As per weekly chart, Nifty formed a long negative candle this week, which moved down as per the larger negative sequence of lower tops and bottoms. Nifty’s near-term trend of continues to be weak; the next lower supports to be watched stand in the 11,000-10900 zone, which could be hit in next few sessions,” said Nagaraj Shetti - Technical Analyst, HDFC Securities.

Rohit Singre Senior Technical Analyst at LKP Securities said the index may see good support in the 11,100-11,000 range. If it manages to hold above the range, some relief rally towards the strong hurdle in the 11,400-11,650 zone is possible, he said.

“The most concerning thing is India VIX, which shot up 70 per cent last week. Once we see some cooldown in India VIX, we may see some stability in the market,” Singre said.

“On weekly charts, Nifty and Nifty Bank traded within an upward sloping channel,” said Jimeet Modi, Founder & CEO, SAMCO Securities.

“On monthly charts, this fall seems like a mean-reverting opportunity for investors with a long-term view. Short-term traders should remain on the sidelines as VIX remains extremely high. The next immediate support level is at 11,100,” Modi said.

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