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Tech View: Nifty50 forms bearish candle, may hit 8,100-8,000 zone

The overall structure shows that Nifty50 is poised to get into the sub-8,000 level.

, ETMarkets.com|
Last Updated: Mar 30, 2020, 08.57 PM IST
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Nifty has tumbled towards its hourly lower Bollinger Band.
NEW DELHI: NSE Nifty on Monday snapped a 4-day winning streak, as the bears made a comeback on Dalal Street. On the daily chart, the index formed a bearish candle with a lower wick. This suggests that the intraday recovery was sold into. Analysts said the index may fall towards the support area of 8,100-8,000 in the coming sessions.

"Technically, 8,100-8,000 is the important support region for the index to watch out for. If the index breaches the mentioned support, steep downside is likely. On the flipside, 8,600 and 8,850 levels will now be immediate resistances," said Ruchit Jain of Angel Broking.

Jain advised traders to avoid aggressive bets and have a proper risk management and an exit strategy.

For the day, the index fell 379.15 points or 4.38 per cent to 8,281.10. During the day, the key hourly moving averages induced the bears for a fresh round of selling.

"Nifty has tumbled towards its hourly lower Bollinger Band. The bands are about to start expansion after contraction. Thus, we are likely to witness a sharp fall going ahead. The overall structure shows that the Nifty is poised to get into the sub-8,000 level," Gaurav Ratnaparkhi of Sharekhan.

Mazhar Mohammad of Chartviewindia.in said the index looks to be retracing the last leg of the rally from the lows of 7,511-9,038, perhaps owing to profit booking.

"If some sort of short term uptrend is in place from recent lows of 7,511, the current downswing from the highs of 9,038 shall not go below 7,816 levels in the ideal scenario," he said.

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