NEW DELHI: The bulls were at the receiving end on Monday.
Their comeback attempt went in vain, and the Nifty50 ended the session at the days low.
In the process, the 50-pack index formed a Bearish Engulfing Pattern on the daily chart.A breach of the 10,600-620 range in the coming session may further weaken the technical outlook for the index.
On the other hand, the 10,770 level proved too strong a hurdle and may remain so over the next few sessions.For the past three sessions, the Nifty50 failed to cross multiple resistance zone between 10,780 and 10,790 levels, which now remains a crucial hurdle, said Rajesh Palviya, Head Technical Derivatives Analyst at Axis Securities.For the day, the index fell 67.70 points, or 0.63 per cent, to 10,628.On the hourly chart, the index violated its eight sessions up-sloping trendline support, indicating weakness.
Daily strength indicator RSI and momentum oscillator Stochastic both turned negative and are below their respective reference lines, indicating a negative bias, Palviya said.The Bearish Engulfing Pattern on the daily chart indicated a negative bias for the short term.
More weakness could be in store in the near term, and the next lower level to be watched is 10,555, in the next few sessions, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.If it fails to hold its crucial support at 10,620, then weakness could get extended towards 10,550 level, says Chandan Taparia of Motilal Oswal Securities.
Taparia sees upside hurdles at 10,680 and 10,707 levels.Mazhar Mohammad of Chartviewindia.in advised short-term traders to avoid fresh longs, barring select scrips, where upside strength is clearly visible on the technical charts.He sees limited upside and said the ideal destination for the ongoing downswing is placed at 10,419.
This will culminate one leg of corrective structure, he said.