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Nov 13, 2017 04:46 PM IST | Source: Moneycontrol.com

Technical View: Nifty forms solid bear candle; Supertrend indicator gives ‘Sell’ signal

Investors are advised to remain cautious and focus on stock specific opportunities. Bulls will only be able to gain momentum when Nifty climbs back above 10,350 levels. However, if the weakness persists Nifty could slip towards 10,100.

Kshitij Anand @kshanand

The Nifty50 which started on a muted note on Monday failed to pull the index back above 10,300 which it was able to do in the past two sessions and made a solid bear candle on the daily candlestick charts.

After a bearish crossover registered on MACD charts on 8th November, Supertrend Indicator too gave a ‘SELL’ signal on the daily candlestick charts today.

'Supertrend' is a trend following indicator just like Moving Averages and MACD (Moving Average Convergence Divergence). It is plotted on prices and their placement indicates the current trend.

The last time it gave a sell call was on 25th September 2017. The index went on to record a low of 9,690 before bouncing back towards 10,000 when it triggered a buy signal again on the charts.

The Nifty opened at 10,322 and rose marginally to hit an intraday high of 10,334. It slipped to an intraday low of 10,216 before closing the day at 10,224, down 96 points.

Investors are advised to remain cautious and focus on stock specific opportunities. Bulls will only be able to gain momentum when Nifty climbs back above 10,350 levels. However, if the weakness persists Nifty could slip towards 10,100.

“Bulls disappointed as Nifty50 registered a solid bear candle after two days of positive consolidation dashing the hopes of a pullback rally. It is looking more like a resumption of downswing after consolidation breakdown on lower time frame charts,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Hence, traders should not be in a hurry to go for long positions as supports are getting broken down one after the other. It will be prudent to wait for a strength above 10350 levels rather than buying the dip in haste,” he said.

Mohammad further added that if the weakness persists then Nifty50 should ideally go down all the way down to 10100 levels as we have been pointing out for quite some time when the correction was triggered around 10490 levels.



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The Nifty failed to hold above 10,300 despite positive cues from the domestic market and global indices Nifty sliced below crucial supports and moving averages.The index lost nearly 100 points which were 2nd largest fall recorded in the last few trading sessions in the last two months. “A long red candlestick pattern is seen which further indicates stronghold of bears at upper levels and continuous selling pressure,” Mustafa Nadeem, CEO, Epic Research told Moneycontrol.

The Nifty50 closed below its 20-days MA after almost a month which has further strengthened short-term bear grip on the market. Higher activity has been observed in 10100 - 10000 strikes while on the upside it is at 10300 - 10400.

“Since the range is still higher we may see higher volatility in coming days, November and December. We maintain our Sell on any Rise strategy,” said Nadeem.

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