Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty witnessed another sharp declines on Tuesday, after a similar weakness of Monday and closed the day lower by 215 points. After opening on a positive note, the market showed volatility with positive bias in the early to mid part of the session. A sharp weakness got triggered in the later part of the session and the market witnessed massive selling pressure towards the end and closed near the lows.
A long negative candle was formed on the daily chart, which indicate an attempt downside breakout of the support 17000-16800 levels. The display of violent declines in the last two sessions indicate steep down trend is on the way. Previously, the area of 17000-16800 levels has witnessed larger movement during upside and the downside breakouts in the past and the sharp move has occurred on both sides.
The overall chart pattern of Nifty indicate a decisive down trend. A move below the support of 16800 levels could open the door down to lower 16200-16000 levels in the near term. Any pull back rally could find resistance around 17100 levels.