Story continues below Advertisement Remove AdThe Nifty 50 opened higher and made an attempt to touch 22,500, but could not sustain for long.
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, believes that the Nifty is heading towards the lower end of the rising channel placed at 22,150.
The Nifty has closed below the 20-day (22,444) and 40-day (22,311) moving averages which is a sign of weakness, and the daily momentum indicator has a negative crossover which is a sell signal, he feels.
On the hourly chart, a Head and Shoulders pattern has emerged, with the index already breaking below the neckline.
Hence, more weakness is anticipated in the coming days, potentially pushing the index towards 47,700, Rupak De, senior technical analyst at LKP Securities said.
Market Falls Further
The Nifty 50 extended southward journey for the third consecutive session, though it managed to defend 22,300 on the closing basis and 50-day EMA (exponential moving average 22,240) on the intraday basis on May 7. The consistent increase in volatility also made the bulls uncomfortable and favoured bears.
The index continued lower highs formation for yet another session after breaking the previous day's Inside bar pattern on the downside, and the momentum indicator RSI maintained negative crossover, all indicating the further selling pressure can't be ruled out, and the index may be inching down towards the lower end of rising channel that comes around 22,150, which can be the next support for the Nifty. If the index breaks this support then, it may go down towards 21,800, which coincides with 100-day EMA as well as the low of the recently record high rally, experts said.
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The Nifty 50 opened higher and made an attempt to touch 22,500, but could not sustain for long. The index lost all its opening gains at the end of initial half an hour of trade and closed with 140 points loss at 22,303, forming bearish candlestick pattern on the daily charts.
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, believes that the Nifty is heading towards the lower end of the rising channel placed at 22,150.
The Nifty has closed below the 20-day (22,444) and 40-day (22,311) moving averages which is a sign of weakness, and the daily momentum indicator has a negative crossover which is a sell signal, he feels. Thus, considering the above parameters, he expects the Nifty to trade weak over the next few trading sessions.
On the weekly options front, the maximum Call open interest was seen at 23,000 strike, followed by 22,500 and 22,800 strikes, with maximum Call writing at 22,400 strike, then 22,300 and 22,500 strikes, while on the Put side, the 22,000 strike owned the maximum open interest, followed by 21,800 and 21,500 strikes, with writing at 21,800 strike, then 22,300 strike.
The above options data indicated that 22,000 is expected to be next key support area for the Nifty 50, with hurdle on the higher side at 22,400-22,500 levels.
Bank Nifty
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The Bank Nifty also remained in control of bears, falling 610 points or 1.25 percent to 48,285, and formed long bearish candlestick pattern on the daily charts. The index has broken down below 10 as well as 21-day EMAs (exponential moving average) on Tuesday.
On the hourly chart, a Head and Shoulders pattern has emerged, with the index already breaking below the neckline. Hence, more weakness is anticipated in the coming days, potentially pushing the index towards 47,700, Rupak De, senior technical analyst at LKP Securities said.
However, resistance is observed at 48,800 on the higher end, he feels.
Meanwhile, the India VIX, the fear gauge, extended uptrend for ninth consecutive session, maintaining the bulls at uncomfortable position. The index jumped 2.45 percent to 17.01 levels on Tuesday and rallied nearly 67 percent in nine days.
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