The Nifty on Thursday settled February futures and options (F&O) series below the 10,800 level.
The day’s open became the session high as the index slumped below its 200-DMA and ended up making a ‘Bearish Belt Hold’ candle on the daily chart. The index is all likely to stay in a range for now, but a fall below 10,729 may bring deeper correction, said, analysts.
There was a tug-of-war between the bulls and the bears around 200-DMA level, where the bears appear to prevail, said Arun Kumar, Market Strategist at Reliance Securities.
“But the index till looks range-bound on near and medium-term timeframes. The critical support for the index is at 10,680 while it could face headwinds around 10,862-10,915,” the expert said.
A sustainable move below the support of 10,729 could open up more weakness for the near term, Kumar stated.
For the day, the index fell 14.15 points, or 0.13 percent, to close at 10,792.50.
The index has been condensing within 10,890-10,770 levels, representing the short-term sideways movement. Either side breakout will signal further direction, said Rajesh Palviya of Axis Securities.
According to Mazhar Mohammad of Chartviewindia.in, the last three sittings of price action are looking like a mere pause inside the ongoing upswing from the lows of 10,585 levels.
“The index can be expected to pick up momentum on the upside once it manages a strong close above 10,900. In such a scenario presuming a sustainable breakout above the said resistance level, the upswing can as well eventually extend towards 11,100 levels,” he answered.
Meanwhile, the index has trained a Doji candlestick pattern in the consecutive expiry months, which clearly indicates lack of trend in the headline Indices at the moment as bulls and bears try to get an upper hand, said Aditya Agarwala, Senior Manager, Technical Analysis at YES Securities.
Traders are advised to adjust on stock-specific opportunities as long as Nifty trades above 10,729 on a closing basis below while it can come under renewed selling pressure with an initial target of 10,645, Mohammad said.