Tech View: Nifty50 forms bearish candle; 11,300 level key support
a breach of 11,300 would extend the ongoing correction towards the 11,200–11,108 zone.
The index needs to negate this trend to get some stability or pause in the selling pressure, said Chandan Taparia of Motilal Oswal Securities.
The 50-stock pack been trying to hold above the 11,300 level, but supply pressure was intact at every bounce, Taparia added.
On Monday, the index fell 82.10 points, or 0.72 per cent, to 11,337.15.
The 11,300 level coincides with the ‘multi-month’ trend line, drawn by connecting October 2018 and February 2019 lows. Besides it is the 78.6 per cent retracement of the entire rally from 11,108.30 to 12,103.05, said Sameet Chavan of Angel Broking.
“Considering this, a possibility of some relief in the next couple of days cannot be ruled out. In this scenario, 11,400-11,450 may be retested. That said, the overall chart structure is distorted and as long as the index is below 11,650-11,700, intermediate rebounds should only be treated as short term relief,” Chavan added.
The price setup and near-term oscillators continue to be in sell mode and there is still scope for further fall towards 11,130-11,260 in the near term, said Arun Kumar, Market Strategist at Reliance Securities.
Angel Broking’s Chavan said a breach of 11,300 would extend the ongoing correction towards 11,200–11,108 levels.