NEW DELHI: Traders on Monday made sure the Nifty50 respects the 10,300 level, as the index recouped half of the intraday losses to settle the first day of the F&O expiry week at 10,378.
The index formed a 'Bearish Belt Hold ' pattern on the daily chart, as the opening level ended up as the intraday high. Besides, a close below 10,398 for the index confirmed a bearish continuation chart pattern called 'Inverted Pennant.' The index is now placed below the 89-EMA for the first time in recent months, Sameet Chavan of Angel Broking said, suggesting caution.
"We expect the Nifty50 to retest the 10,200-10,033 zone in the near future. Any bounce back towards 10,456-10,550 zone is likely to get sold into. Short-term traders should ideally avoid taking positions in the opposite direction, as we see sharper corrective moves than rallies in this falling market," Chavan said.
The Nifty fell 73.90 points, or 0.71 per cent for the day but closed well above its intraday low of 10,302 level. The Nifty50 broke its seven-day consolidation phase, but made a dramatic recovery in the in the last hour of the session that appears to be keeping the chances of the bulls alive in the game, said Mazhar Mohammad of Chartviewindia.in.
"Emergence of slightly positive divergences on the momentum oscillators of Bank Nifty did not rule out the chances of the bulls in the next session. Contrary to this, if bear domination continues, then the indices should head to test its 200-day moving average at the 10,070 mark," the analyst said.
Chandan Taparia of Motilal Oswal Securities said the index has made lower highs and lower lows for three sessions now. Should the index sustain below 10,450, it could test 10,333 and 10,276 levels. On the upside, the immediate hurdle is seen at the 10,480 level, the expert said.