Nifty50 remained in the negative territory, failing to breach the 17,300 mark as investors continued taking money off the table amid global uncertainty.
The benchmark index opened at 17,289 against the previous close of 17,222.75 but failed to hold altitude and slipped to 17,076.55 in intraday trade. Eventually, the index closed 70 points, or 0.40 percent, lower at 17,153. Sensex closed 233 points, or 0.41 percent, lower at 57,362.20.
Nifty has been hovering within a narrow range of 17,000-17,350 and a breakout on either side would decide the next move.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, pointed out the benchmark index seems to be in a consolidation mode, after two consecutive strong closes on weekly charts, as the trading range for the current week remained only 434 points.
"At a recent high of 17,441 on March 23, daily MACD generates a buy signal as it crossed the equilibrium line after a prolonged period. Usually, it is observed that such crossovers after a sharp up move will lead to consolidation before the resumption of the upswing," said Mohammad.
"Unless Nifty closes below its psychological support of 17,000, where it also coincides with the 200-day moving average, the probability of resuming the upswing shall remain much higher, though it will be confirmed on a close above 17,450. For the time being, for index long positions, a close below 17,000 can be the better stop loss," he said.
With Nifty near the 50-day simple moving average (SMA) or 17,400, the market is consistently facing selling pressure which is broadly negative.
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities, observed on the weekly charts, the index has formed a small bearish candle that also indicates further weakness.
"We are of the view that as long as the index is trading below 17,325, the correction wave is likely to continue in the near future and below the same the chances of hitting a 200 day SMA or 17,000 would turn bright. On extended weakness, the index may fall up to 16,900-16,870 levels. On the other hand, a fresh uptrend is possible only after the level of 17,325. Above the same, one quick pullback rally till 17,400-17,450 is not ruled out," said Athawale.
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