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Tech View: Nifty50 forms a Bearish Candle; correction may have set in

The 12,000 level will now pose as a barrier in case of any pullback, Ratnaparkhi said.

, ETMarkets.com|
Dec 06, 2019, 05.07 PM IST
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Nifty50 appears to have registered not only a breakdown below its 19-day-old Ascending Channel
NEW DELHI: Nifty50 formed a bearish candle on the daily chart on Friday, as it broke below its immediate resistance in the 11,950-60 zone with ease, suggesting that a short-term correction might have set in.

For the day, the index closed 96.90 points, or 0.81 per cent, lower at 11,921.

“The index has closed below its short-term moving average and the momentum indicators are weakening. The market breadth was also negative. All these indicators signalled a short-term correction. The index may find immediate support at the 11,800 level,” said Manav Chopra of Indiabulls Ventures.

In terms of the Wave structure, the index formed Wave C of a minor degree correction and can now roll down towards the junction of the 40-DEMA and the daily Bollinger Band, which is near the 11,820–11,800 zone, said Gaurav Ratnaparkhi of Sharekhan.

The 12,000 level will now pose as a barrier in case of any pullback, the expert said.

“Nifty50 appears to have registered not only a breakdown below its 19-day-old Ascending Channel, but also decisively closed below its 13-day exponential moving average, which had propped up the prices on a couple of occasions in the past,” said Mazhar Mohammad of Chartviewindia.in.

“This channel breakdown opened up new targets for Nifty around 11,700, which also coincides with the 50-day exponential moving average (11,733). In the next couple of sessions, if Nifty slips below 11,888, then the correction shall extend up to 11,800 level,” he said.

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