NEW DELHI: The Nifty50 tanked nearly 3 per cent during what turned out to be a disappointing week. The index saw gap-down openings in three out of past five sessions, while it failed to capitalise on a gap-up opening seen on Wednesday, suggesting that the bears were in the driving seat through the week.
For the week, the Nifty50 fell 306 points, or 2.84 per cent, to settle at 10,454.
Chandan Taparia of Motilal Oswal Securities noted that the index is near its major support – at its rising trend line that connects the swing lows of 9,687, 10,033, 10,074 and 10,350 levels.
On the weekly chart, it saw resistance at its rising supply trend line at the beginning of February and now it has come to the lower band of the support trend line within its rising channel. The short-term trend is under pressure as long as the index does not cross and hold above the 10,650 level, Taparia said.
But if it manages to cross and hold above 10,500, a bounceback towards 10,600 and 10,650 levels cannot be ruled out, Taparia said. On Friday, the index fell 121 points, or 1.15 per cent.
Nifty's recent gap-down openings suggested fear among the traders, but post such openings, the market did not witness follow-through selling at least for that day, said Mazhar Mohammad of Chartviewindia.in.
This kind of behaviour points to some accumulation at intraday low points. Hence, there will be a higher possibility of a rally once volatility subsides in global financial markets. For any reason if Nifty breaches its recent low of 10,276, then the correction may get extended up to 10,040 level, while a close above 10,637 shall be considered the initial sign of strength in the market," he said.
Lower levels 10,100, 10,200 will attract good demand as the range will be the inflection point in the short term. For now, more pressure is building up and it will take a lot of effort of the bulls to take them out, said Mustafa Nadeem, CEO at Epic Research.