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Tech View: Nifty slips below 15,700 level, further weakness likely

NEW DELHI: Nifty50 on Thursday fell for the fourth consecutive session. In the process, it breached its immediate support at 15,700 level and ended up forming a bearish candle on the daily scale. The NSE barometer, which has been making lower lows for four sessions, may find some support in the 15,650-600 range, analysts said.

Rohit Singre of LKP Securities said the 15,650-15,600 range has in the past offered good support and, thus, a break below this range can intensify profit booking. Singre sees Nifty50’s resistance in the 15,750-15,840 range.

“Red candles for four days in a row mean Nifty50 is getting oversold on a stochastic oscillator. The support for Nifty50 is now at 15,600-15,625. The index needs to move above 15,750 level to propel itself towards the 15,900-15,950 zone,” said independent analyst Manish Shah.

For the day, the index closed at 15,680, down 41.50 points or 0.26 per cent.

On the hourly chart, said Gaurav Ratnaparkhi of Sharekhan, each leg of the decline is getting smaller. This can indicate selling exhaustion.

“With the current decline, Nifty50 has come down to test the swing low of 15,673. Though this level was breached on an intraday basis, Nifty has managed to stay above it on a closing basis. Also, Nifty has now reached the lower end of a rising channel, which is near 15,650 level,” he said.

Mazhar Mohammad of Chartviewindia.in said the index has closed below its 7-day consolidation zone of 15,900-700 level and an inability of the bulls to reinstate the index above 15,700 level on Friday can drag the index towards a consolidation breakdown target of 15,500.

That level, Mohammad said, coincides with the lower end of a larger consolidation band in the 15,900-500 zone. “For the time being, traders are advised to remain short and look for a target of 15,550 with a stop loss above 15,700 on a closing basis,” he said.

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