On the weekly scale, the index formed an indecisive candle after four bullish candles. Analysts said the index could be in for consolidation, with a negative bias.
Nifty50 appears to be on the verge of reversing its course of direction, as the long bearish candle almost reversed gains of the last three trading sessions, said Mazhar Mohammad of Chartviewindia.in, who added that the index formed an indecisive formation on the weekly chart that, he said, is a cause for concern.
“At this point, the only solace for bulls is the fact that some buying emerged as the index entered the bullish gap area present between 17,764 and 17,724 levels, registered on August 14, which was defended at least on a closing basis. Therefore, if the bulls fail to defend 17,710 levels in the ensuing week, more weakness is likely,” he said.
For the day, the index closed at 17,758.45, down 198.05 points or 1.10 percent.
“In the week gone by, the index had crossed a crucial falling trendline drawn from October 2021 high and has now moved back towards the trendline to retest the same. Thus, going ahead, the Nifty50 is likely to witness a consolidation near 17700-18000 in the short term,” said Gaurav Ratnaparkhi, Head – Technical Research at Sharekhan.
On the weekly time frame, Nifty showed a bearish shooting star pattern as Nifty saw a bit of selling pressure during the day. The barrier at 18,100 is acting as an impediment to any further rallies in Nifty.
Manish Shah said the bears Nifty50 could remain subdued over 3-4 days and could drop towards 17,500-17,600.
“It is too early to call a major top as the underlying trend structure remains intact. We will look for a decline in Nifty to enter on the buy side of the market. We could see a pretty wild expiry, with some volatile gyrations going into the last week of August,” he said.
Nifty Bank
The banking index closed the day at 38,985.95, down 670.20 points or 1.69 percent.
Rupak De of
noted that Nifty Bank has also formed a Bearish Engulfing pattern around the resistance zone on the daily chart. Besides, a fall from the consolidation range is also visible in the daily timeframe, he said.
“The index has found support at the previous swing high on the daily chart. The trend is likely to remain sideways to negative in the near term. A fall below 38,800 may trigger a serious correction in the banking space. Support on the lower end is visible at 38,800/38,300. On the higher end, resistance is visible at 39,500,” he added.
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