Nifty selloff intensified on Friday after the 50-pack index breached its crucial support of 18,000 level and that with a gap-down opening. The 50-pack index tested sub-17,800 levels during the session and ended up forming large bearish candles on daily and weekly charts. The bears are in complete control, said analysts, who said Nifty can drag towards 17,500 level in coming days.
Other than falling below 18,000, the index slipped also below the 200-DEMA (double exponential moving average). “The daily momentum indicator is in a bearish crossover and falling. The sentiment has turned extremely bearish; a further decline is expected from here, with a potential near-term reach of 17,550. Resistance on the higher end is visible at 18000–18,100,” said Rupak De, Senior Technical Analyst at LKP Securities.
For the day, the index closed at 17,806.80, down 320.55 points or 1.77 per cent. For the week, the index was down 462.20 points or 2.53 per cent.
Chandan Taparia of Motilal Oswal Securities noted that the index formed a Bearish candle on the daily scale and has been making lower lows from the last seven sessions. As long as the index trades below 17,950, Taparia expects the weakness may continue towards 17,650 and 17,500. Hurdles for the index are placed at 17,950 and 18081 levels,” he said.
Nifty has breached the rising support trendline, which indicates that it is firmly in the grip of bears, said Jatin Gedia, Technical Research Analyst at Sharekhan.
On the weekly charts it has reached the 20-week moving average (17,839), which can provide some relief during the next week, said Jatin Gedia, Technical Research Analyst at Sharekhan.
“But it is likely to be short lived and overall short term trend has turned negative. On the downside we expect the Nifty to drift lower till 17,560 which is the 61.82 per cent Fibonacci retracement level of the rise from 16,748–18,889. In terms of levels, Crucial support is placed at 17,730 – 17700 and the immediate resistance stands at 17,930-18,000,” Gedia said.