NEW DELHI: The Nifty50 fell half-a-per cent on Tuesday and formed a bearish candle on the daily chart.
The candle resembled a Bearish Belt Hold pattern, as it had little-to-no upper wick, suggesting selling pressure on the index from the word go.
That said, some buying emerged at low levels, as suggested by a long lower wick on the daily chart.Analysts believe the ongoing selling pressure may continue should the index break below the 11,480 level in the short term.A long negative candle signals the beginning of broadbased weakness.
The short-term trend of Nifty50 continues to be negative and there could be more decline in the near term.
The key support to be watched is at the 11,480 level, said Nagaraj Shetti of HDFC Securities.For the day, the index slipped 62.05 points, or 0.54 per cent, to close at 11,520.The index formed a Bearish Belt Hold candle, as it slipped below the rising support trend line.
It also engulfed the positive price movement of last two weeks and partially filled the gap area near the 11,499 mark.
As long as it holds below 11,620, the Nifty50 may drift towards its next support at 11,450.
The upside hurdle is at 11,620 level, said Chandan Taparia of Motilal Oswal Securities.As long as the Nifty50 does not drift below 11,480 level, some sort of relief can be expected for the bulls in the next couple of sessions, said Mazhar Mohammad of Chartviewindia.in.A close below the 11,480 level shall further accentuate selling pressure, initially towards the 11,424 level, as the entire corrective phase is expected to last a couple of weeks.
Traders are advised to make use of rallies, if any, to exit stuckup positions and wait for signs of strength before creating fresh longs.
On the upside, a close above 11,600 can be expected to provide some relief to the bulls, the expert said.