Nifty outlook: Tech View: Nifty forms Bearish Belt Hold as bears tighten grip

NEW DELHI: Nifty on Wednesday tumbled 4 per cent in a session, which was ruled entirely by the bears. The selling kicked off from the word go and ended near the day’s close, as the index formed a Bearish Belt Hold pattern on the daily chart.

Analysts said the index needs to defend the 8,250 level to avoid further rounds of selling.

“Nifty in this phase of correction is witnessing either side’s sharp moves. So far the support zone of 8,250 is held. If breached, the next support on the downside is placed near the 8,000 level. Nifty will have to top 8,600 zone on the upside for a rally to develop. Despite 300-plus points fall, the market breadth was positive, which is worth noting,” said Manav Chopra of Indiabulls Securities.

For the day, the index closed at 8,253.80, down 343.95 points or 4 per cent.

“The bears had an upper hand throughout the day, resulting in a sustained decline till the end. On the way down, the index broke the swing low of 8,244, which confirms the next leg down. From a short term perspective, 8,000-7,920 will be the initial target area to watch out for with the potential to head significantly lower,” said Gaurav Ratnaparkhi of Sharekhan.

Traders should refrain from taking long positions, said Chandan Taparia of Motilal Oswal Securities.

This analyst sees resistance for Nifty at 8,555 and 8,888 levels.