NEW DELHI: Nifty on Monday formed a bearish candle on the daily chart for the third straight session.
The index closed below its 20-day simple moving average (SMA) of 12,059, and made a lower low formation for yet another day, suggesting supports were shifting lower.
Analysts said any sustained move below 12,000 could bring the bears back.A close below 20-DMA is a sign of weakening uptrend.
Sustained trade below 12,040 level will drag Nifty to 11,990-11,930.
On the upside, 12,090 will act as a tough supply zone, breaching which the index can move towards 12,155-12,220 range, said Aditya Agarwala of YES Securities.For the day, the index closed at 12,045.80, down 67.65 points or 0.56 per cent.
The closing level was also a tad below the indexs 50-Day exponential moving average (EMA).At the current juncture, we are observing formation of a Bullish Harmonic pattern called Bullish Shark on hourly chart and Potential Reversal Zone (PRZ) of the same is placed at 12,007-12,018.
As such, the ongoing correction may take a halt at around 12,000 and if the index holds above that, we may see an upmove towards 12,250, says Chandan Taparia, Technical - Derivative Analyst at MOFSLRohit Singre of LKP Securities said that any sustained move below 12,000 will have the potential to push the index towards 11,800.
He sees an immediate hurdle in the 12,100-12,160 range.