NEW DELHI: The Nifty50 slipped for the third straight session on Wednesday, making lower highs and lower lows on the daily chart for second day in a row.
The index formed a bearish candle with a long wick, resembling a Hammer.Analysts said late buying seen on Wednesday could just be short-coverings and follow-up buying is required for any shift in the ongoing weak trend.Chart patterns indicated weak bias and buying seen in the last hour could just be due to short coverings after a sharp drop, said Nagaraj Shetti of HDFC Securities, who sees no indication of a trend reversal as yet.
Mazhar Mohammad of Chartviewindia.in seconded the view.For the day, the index fell 43.35 points, or 0.38 per cent, to 11,476.
In the process, Nifty broke its 20-day SMA on a closing basis, which indicated further weakness.
Any minor bounce should be used as a selling opportunity, said Gaurav Ratnaparkhi of Sharekhan.
Chart patterns showed should Nifty sustains below 11,520, it may slide further towards 11,480 and 11,450 levels in the coming sessions.
An important resistance is placed in the 11,580-11,620 range, said Rajesh Palviya of Axis Securities.Mohammad said a Hammer-like formation usually has bullish connotations, provided there is a follow-through recovery in the next session.However, there will be short-term strength in the indices only on any close above 11,575 in next session, he said and advising conservative traders to wait for more signs of stability, before taking fresh longs.Downside support is seen in the 11,420-11,400 range, said Chandan Taparia of Motilal Oswal Securities.