NEW DELHI: News of coronavirus reaching national capital Delhi reversed huge gains that Nifty had piled up earlier on Monday, and the index eventually settled the day below the 11,150 mark, extending the losing streak into the seventh day.While the index has been in the oversold zone, as suggested by the 14-day RSI value of 23 a value below 30 is considered oversold -- a fall below the 11,000 level could intensify the selloff, analysts warned.
For the day, the index formed a Long Bearish Candle on the daily scale after trading in a wide 400-point range.
The index, which was up 231 points earlier in the day on hopes of a global stimulus, went haywire, hitting a fresh swing low of 11,036, before closing the day at 11,132, down 69 points or 0.62 per cent.Mazhar Mohammad of Chartviewindia.in said Nifty seems to be trading close to a confluence of support levels, as at Mondays intraday low of 11,036, it tested the ascending trend line that is in progress from the October 26, 2018 low of 10,004.Apart from this, critical long-term averages are placed around the 11,111 level.
The possibility of this correction culminating around the 11,000 level looks higher, he said.Nagaraj Shetti of HDFC Securities said the formation of Long Bear Candle around the crucial lower support of 11,000 could indicate that a bottom formation in Nifty could be due.Charts with weekly and monthly timeframes indicate that the 11,000-10,900 range is going to be a strong support zone for the index and there is a possibility of bottom formation around these area in the next few sessions, Shetti said.Rohit Singre of LKP Securities said the index has a strong support at 11,000, which if breached could drag Nifty further down.
The index has resistance near the 11,210-11,300 zone, he said.