Selling pressure intensified in the stock markets in the week ended October 29, with the Nifty 50 falling more than 5 percent from its record high (18,604) and 3.6 percent over two consecutive weeks as Morgan Stanley and Nomura downgraded Indian equities due to expensive valuations, dull global cues, FII selling, and inflationary pressure seen on earnings.
The index declined towards 17,600 levels as the October expiry day and the first day of November series had intense selling pressure, with a bearish candlestick pattern formation on both the weekly charts. It was the biggest weekly fall in almost eight months as selling pressure was seen in all sectors.
Experts said the Nifty 50 may find support at about 17,500 in the coming days, while the 18,000 mark would be a crucial resistance level in an uptrend.
“Due to this late dominance from bears, we can observe a few important developments on the charts. Firstly, the ‘lower top lower bottom’ on the daily chart after breaking below 18,000, which coincided with the violation of the key short-term moving average of 20-day EMA (exponential moving average),” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One. “More importantly, if we take a glance at the monthly chart, we can see a formation of a ‘shooting star’ pattern, which certainly does not bode well for the bulls.”