Tech View: Nifty forms ‘Dark Cloud Cover’, support shifts to 11,700

NEW DELHI: Nifty faced selling pressure on Thursday, as the index ended up forming ‘Bearish Belt Hold’ as well as 'Dark Cloud Cover' on the daily chart. It broke a crucial support around 11,760 level, but somehow extended its higher-high higher low formation for the fourth straight session.

The bulls looked exhausted after the recent rise, said analysts, who feel the index needs to hold above 11,700 to buck the weakening trend.

In two-candle ‘Dark Cloud Cover’, an index opens gap-up, but ends up retracing at least 50 per cent of the previous session’s bullish candle.

Nifty50 opened 69 points higher today, but succumbed to selling pressure later. It ended up falling 34.35 points, or 0.29 per cent, to 11,752.80.

Meanwhile, since Thursday’s opening level proved the index’s intraday high, a Bearish Belt Hold was visible on the daily chart.

Going ahead, if Nifty trades below 11,738 and closes below 11,700, it may result in the failure of recent breakout, said Mazhar Mohammad of Chartviewindia.in.

“In such a scenario, traders should adopt a neutral stance on longside bets. If Thursday’s fall was due to profit booking ahead of a long weekend, the market shall remain sideways and find support in 11,738-11,700 zone,” he said.

On the weekly chart, says Nagaraj Shetti of HDFC Securities, a small bullish candle with long upper shadow signals an emergence of profit booking at highs.

“The resistance of previous swing high of 11,761 is intact as per closing, after a failed intra-week up breakout,” the expert said.