Neal Bhai Reports — Nifty Forms `Large Bear’ Candle, Watch Out for 8688 — The Nifty50 broke below its crucial support level of 8750 on Monday and formed a `Large Bear’ candle on the daily candlestick charts.Traders who have created short positions should remain short with a stop loss of 8820, suggest experts.
Two consecutive bearish candles have already created pressure on the bulls and if the bears manage to push the index below the 8688 level this week, the chance of a steep correction cannot be ruled out, which could take the Nifty50 below the 8000 mark, they said.
The Nifty50 formed a `Large Bear’ candle on the daily charts, which signifies that the bears maintained the selling pressure throughout the session. The index closed near its lowest point of the day .
A `Large Bear’ candle is a continuation pattern, but in an uptrend, it may be precursor of a change in trend, especially if the closing value is lower than the clos ing level of the previ ous candles.
The Nifty50 opened at 8807 and rose mar ginally to an intra day high of 8809, but then the bears inten sified selling pres sure, which pushed the index towards the 8700 mark. The index closed at 8723, down 108 points from the previous close of 8831.
“The Nifty50 for med a `Large Bear’ candle with a gap-down opening, suggesting a strong trend reversal on the downside. If the index slips below the 8,688 level in next four sessions, then the probability of steep cut will be much higher, opening the doors for a correction of the entire swing from the low of 7,715,“ Mazhar Mohammad, Chief Strategist Technical Research & Trading Advisory, Chartviewindia.in, told ETMarkets.com.
“As we have been pointing out in these columns for quite a while, the initial target for the Nifty50 in this downswing is placed close to the 8,550 level. In between, we have a 50-day EMA support around the 8,647 mark, where the bulls may put up some defence,“ he said. — Gold Silver Reports