NEW DELHI: Nifty on Tuesday fell for the second day in a row and formed a bearish candle on the daily chart. The index settled below its 50-day exponential moving average (EMA) of 12,087 and formed higher high and low for yet another day, suggesting that supports shifted lower.

Analysts said the ongoing trend looks weak and the index could extend its weakness in the coming days.

“The key support area of the previous opening upside gap of January 9 has been filled completely at 12,045,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. “This is a negative sign. There is a possibility of further weakness in the market. The next important support is placed at 11,930, which is a swing low of January 8. We expect the area to be tested soon,” he said.

For the day, the index closed at 12,060, down 58.75 points or 0.48 per cent.

“Nifty index looks weak on a near-term basis. It is trading close to its psychological support at 12,000. Incremental selling pressure below this point may lead the index to a fall towards 11,800,” said Arun Kumar, market strategist at Reliance Securities.

The closing of the index below its upward sloping trendline support is signaling that bearishness building up ahead of the Union Budget. “A constant trade below 12,010 level will drag it further lower to 11,970-11,920 levels. On the upside, the 12,080 level will act as a hurdle. If the bulls take it out, it will trigger a short covering rally towards the 12,150-12,180 range,” said Aditya Agarwala of YES Securities.

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RSI moving below the neutral level of 50 is confirming the weakening uptrend, Agarwala said.





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