NEW DELHI: The Nifty50 on Thursday faced resistance around the 10,784 level, which in the past proved a strong hurdle, to eventually close half-a-per cent lower.
The index formed a 'Bearish Belt Hold' candle on the daily chart, suggesting that the bears were in the drivers seat right from the beginning.
The index sent out a sell signal on the MACD chart after falling 124 points over three consecutive sessions. It dropped below its five-day and 13-day exponential moving averages (EMAs), suggesting that more downside could be in the offing.
For the day, the index fell 58.40 points, or 0.54 per cent, to close at 10,682. It looks like the index will make a downward swing below 10,601 and eventually test its 50-day moving average at 10,550 level, before bottoming out, said Mazhar Mohammad of Chartviewindia.in.
For now, a key level to watch out will be 10,725, a breach below which may extend the ongoing correction towards 10,620 and 10,600 levels. The upside hurdle is seen at 10,785 level, said Chandan Taparia of Motilal Oswal Securities.
Mohammad says the ongoing correction should end in the 10,601-10,550 range. "Surprisingly, the advance-decline ratio was skewed in favour of the bulls throughout the session, suggesting that perhaps the broader market might have reached a value zone as many beaten-down names from midcap and smallcap segments clocked decent gains. Strength could be seen on the upside if the index manages a close above 10,780,” the expert said.