NEW DELHI: The Nifty50 index on Monday fell for a third straight session to settle below 10,750 level.
During session, day tested 10,700 level, before buying emerged at lower levels.That said, opening proved days high as index formed a 'Bearish Belt Hold' pattern on daily chart.
If Nifty stays below 10,806 level on a sustainable basis, chances are that it may break below its swing low of 10,628 sooner than later, said analysts.The index broke crucial daily moving averages and rising trendline on daily chart.
It attempted a bearish breakout from distribution triangle on intraday basis, but closed within pattern.
The stage looks set for index to exhibit a downward breakout, said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.For day, Nifty50 fell 57.35 points, or 0.53 per cent, to close at 10,737.60.The index slipped below its 50-day EMA and closed near its lower band of last five trading sessions.
The index needs to cross and hold above 10,777 to witness an upmove towards 10,880.
If it fails to hold same, it may drift towards 10,650-10,600 range, said Chandan Taparia of Motilal Oswal Securities.The daily momentum indicator has sent fresh sell signal with a bearish hook formation.The action over past few days clearly suggests a weak trend ahead, said Arun Kumar, Market Strategist at Reliance Securities.A sustained selling pressure on index below its long-term average of 10,806 for next few trading sessions may lead to a bigger fall, analyst added.Ratnaparkhi said weekly momentum indicator has completed pullback cycle till equilibrium line and looks ready for new cycle on downside.As advance-decline ratio completely favoured bears, traders will be better off to adopt a neutral stance till indices register a directional move, advised Mazhar Mohammad of Chartviewindia.in.