The index broke below the 27-day-old descending channel, which was in progress from the lifetime high of 15,431.
“After hitting Thursday’s intraday low of 14,264, Nifty also bridged the post-Budget day bullish gap present in the 14,336-14,469 zone, which is supposed to act as a support. Unless this index stabilises around current level with a close above 14,575 level in the coming sessions, a further slide can’t be ruled out with a bigger target at 13,570,” said Mazhar Mohammad of Chartviewindia.in.
For the day, Nifty closed at 14,324, down 224.50 points or 1.54 per cent.
Nagraj Shetti of HDFC Securities said Nifty’s short-term trend continues to be weak and a decisive move below 14,300 level may drag it towards the low of 14,000 in the near term.
“A sustained trade below the support at 14,300 level in the coming session may extend the decline to 14,000 level. The RSI stands at a crucial support line at 40 level, which happens to be the lower end of the bull territory. A move below the 40 mark would mean further weakness for Nifty. The bulls need to make sure they push Nifty beyond the 14,500 level for a short-covering rally to play out,” said Aditya Agarwala of YES Securities.
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Rajesh Palviya of Axis Securities finds the 14,300 level crucial, breaking which can trigger a selloff towards the 14,100-14,000 zone. “Nifty’s important resistance levels are placed in the 14,700-14,900 zone. The index is trading below its 20 day-SMA, indicating a negative bias for the short to medium term. Daily strength indicator RSI has turned negative from the overbought territory and is trading below its reference line, signaling a sustained downtrend,” he said.