Below is the Technical Quote On Today`s Market Performance by Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The weakness continued in the Nifty for the fourth consecutive sessions on Wednesday and the benchmark index closed the day sharply lower by 271 points. After opening on a flat note, Nifty started weakness since opening trade. The intraday upside recovery attempt was failed in between and the weakness continued for the whole session.
A long negative candle was formed, which indicate a formation of bearish candlestick pattern like 'three black crows'. Normally, the three black crows pattern is considered as a reliable bearish reversal pattern. Consisting of three consecutive bearish candles at the end of a bullish trend indicate shift of control from bulls to the bears. Hence, the weakness could continue for the coming sessions.
The crucial immediate supports of 10 period and 20 period EMA has been broken down and the upward sloping trend line (connecting 30th Oct and 21st Dec 20 swing lows) has been violated lower around 14350, as per daily timeframe chart. Currently, the Nifty is trading lower.
Nifty on the weekly chart formed a long negative candle so far, after the formation of doji and high wave at the highs in the last two weeks. The reversal pattern as per weekly chart was also seen and the Nifty is expected to slide down to its immediate weekly support of 10 period EMA around 13765 levels in the short term. This moving average has offered base for rising Nifty in the past and resulted in an upside bounce from the higher lows. This is going to be crucial support of the market ahead.
Conclusion: The near term trend of Nifty continues to be negative and the recent all time high of 14753 could be considered as an important top reversal pattern. The formation of reversal and the bearish candlestick pattern (three black crows) could signal more weakness down to 13765 and lower in the next few sessions. Any intraday rise up to 14150 could be a sell on rise opportunity for short term.
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