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    Tech View: Nifty chart signals a meek surrender by the bulls

    Synopsis

    Traders may make use of pullback attempts to create fresh shorts, Mazhar said.

    Tech View: Nifty forms Hammer-like candle; needs follow-up buyingGetty Images
    On a daily basis, NIfty50 formed a ‘Long Black Day’ candle along with a lower high-low pattern.
    NEW DELHI: Selling intensified in Nifty50 on Friday, as the index slipped below its crucial support at 11,450 with ease, signalling a meek surrender by the bulls.

    The index, which last tested this level in May, could drift towards the 11,333-300 range in the coming sessions. Any gain towards the 11,500 level, meanwhile, is likely to be sold into, said analysts.

    On a daily basis, Nifty50 formed a ‘Long Black Day’ candle along with a lower high-low pattern. On the weekly scale also, a bearish candle was observed, suggesting that the pain is here to stay.

    For the day, the index tanked 177 points, or 1.53 per cent, to 11,419. The price setup indicates an incremental decline towards the 11,125-11,300 zone on a near-term basis, said Arun Kumar, Market Strategist at Reliance Securities.

    The index continued to see selling pressure and broke below its previous swing low of 11,461, said Chandan Taparia of Motilal Oswal Securities.
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    “It formed a big bearish candle on the daily as well as weekly charts and started forming lower top and bottom the on lower time-frame chart. As long as the index remains below 11,500 level, any bounce could be sold into towards the next support at 11,333. The immediate support is seen at 11,461,” Taparia said.

    Mazhar Mohammad of Chartviewindia.in said the price action of last two sessions washed out the gains of the entire pullback rally from the lows of 11,461–707 range, which lasted six sessions.

    This kind of faster retracement on the downside clearly suggests that a fresh leg of downswing is in progress.

    “Today’s fall has not only filled the euphoric gap, whose lower end is placed at 11,426, but it failed to sustain above that level on a closing basis, which resulted in a major breakdown on the weekly charts, as Nifty closed below the multiweek ascending channel,” he said.

    Traders may make use of pullback attempts to create fresh shorts, Mazhar said.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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