Nifty 50 opened negative at 16,469.60 and slid back to a level of 16,347.10. However, at lows, purchases emerged to take the index as high as 16,487.25. In the end, it closed 153.20 points or 0.92 percent at 16,416.35.
“Technically, the pattern signals a weak trend with range-bound action. Nifty is currently on the cusp of breaking below the critical support at 16,400 levels (polarity change support and daily 10- and 20-day EMA). But small purchases are still emerging from the lows,” said Nagaraj Shetti, Technical Research Analyst,
Analysts said the market is waiting for the trigger of RBI’s mid-quarter policy review meeting, which is expected to decide monetary policy tomorrow. The negative outcome could cause more weakness and any positive or status quo approach could send the bulls back into action.
The positive streak such as higher tops and bottoms is intact on the daily chart, analysts noted.
“Nifty’s short-term trend remains negative. Due to the formation of small negative candles with lower shadows at the bottom and placement of crucial supports, you should expect Nifty to witness a sustained upward jump from the lows of 16300-16250 levels in the next 1-2 sessions,” said shetti.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, says it was another day of “boredom” for markets as market participants choose to be a little cautious ahead of the RBI’s monetary policy which will be scheduled in the next session.
Amid sluggishness, the Nifty has managed to successfully defend its key support of 16,400 on a closing basis and the way some of the banking heavyweights recovered in the last few minutes of trading was certainly a little encouraging. said Chavan.
“In case of a favorable RBI result, we can see Nifty regain 16,600-16,700 levels; while on the other hand any disappointment would lead to a breakout of crucial supports placed around 16,400-16,300.
Ruchit Jain, Lead Research, 5paisa.com, believes that a weakening market size is a negative sign for the near term. On the hourly chart, Nifty has resumed its “Lower Top Lower Bottom” structure after the recent retracement move, indicating that the market has resumed its short-term downtrend, he added.
Jain suggests that traders should avoid bottom fishing and view any upside as a result of the event as just a pullback and aim to lighten the lungs in such upsides.
(Disclaimer: The experts’ recommendations, suggestions, views and opinions are their own. They do not represent the views of Economic Times)