IGI Logo

Daily Technical View on Nifty

Formation of ‘Three Black Crows’ pattern..

Observation: The carnage in Dalal Street continued on Thursday, as Nifty witnessed sharp weakness for the third consecutive sessions and closed the day lower by 264 points. After opening with a downside gap of 95 points, the market continued its weakness in the early to mid part of the session. It later shifted into a range bound movement with weak bias in the later part and closed near the lows. The opening downside gap remains unfilled.

A long bear candle was formed on the daily chart with gap down opening. One may observe three long bear candles in the last three sessions, which is indicating a bearish three black crows pattern, which signal down trend continuation pattern for the short term.

Nifty is currently placed at the support of 200 day EMA for the first time since past April 2023. Though, Nifty is placed at the key moving average supports, still there is no indication of any reversal pattern building up at the lows. The negative pattern like lower tops and bottoms of larger degree is intact on the daily chart and the market finding support to form a new lower bottom of the sequence. Still there is no indication of any bottom formation at the lows.

Conclusion: The short term trend of Nifty continues to be negative. Having moved into oversold region, there is a chances of upside bounce occurring from the lows.

A decisive move below 18800 levels could open next downside of 18500-18600 levels in the near term.

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337