market outlook: Tech View: Nifty forms bearish candle, may consolidate between 8,900 & 9,300

NEW DELHI: Nifty on Wednesday saw selling pressure at the upper end of a bearish Wedge pattern. From an intraday high of 9,261 level, the index eventually closed below the 9,000 level, forming a bearish candle on the daily chart. Analysts said the index may consolidate between 8,900 and 9,300 levels in the next few sessions.

Aditya Agarwala of YES Securities said a sustained trade below the 8,900 level will extend Nifty correction to 8,800 and 8,710 levels. He sees resistance at 9,000 level.

“A trade beyond this resistance can trigger a short-covering rally to 9,130 and 9,300 levels,” he said. For the day, the index fell 68 points, or 0.76 per cent, to 8,925.

“Weakness will be confirmed on a close below 8,792 level, which shall accentuate the selling pressure in Nifty by confirming an interim top around the 9,261 level,” said Mazhar Mohammad of Chartviewindia.in

The index has been forming a distribution since the last 3-4 sessions, said Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan. On the upside, he said, the resistance zone is at 9,300-9,400 which coincides with the 38.2 per cent retracement of the January-March fall.

“Thus unless it takes out the 9,300-9,400 range on a closing basis, Nifty is not expected to resume the larger downtrend. The 8,650-8,500 range will be the initial target area on the downside,” he said.