“There can be a slight hope of a recovery from the current level as Nifty, at a low of 16,142, retraced around 80 per cent of the last leg of the rally from the low of 15,671-18,114. If it materialises, this pullback shall attempt to bridge the bearish gap between 16,484 and 16,651 levels, registered on May 6,” said Mazhar Mohammad of Chartviewindia.in.
Mohammad said if traders are sitting on short positions, they will be better off by covering them, whereas some stability may offer an opportunity to play for a pullback move on the long side.
Chart formations similar to Monday’s, after a reasonable decline or near support levels, sometimes act as an upside reversal pattern post-confirmation, said Nagaraj Shetti, Technical Research Analyst at Securities.
This analyst, however, noted that the short term trend remains negative, and there is still no confirmation of any bottom reversal as of now.
“Any upside bounce from here could be short-lived and that could be a sell on rising opportunity. The near term downside target for the Nifty50 remains at the 15,700 level,” Shetti said.
Shrikant Chouhan of Securities said the larger texture of the market is still negative but if the index sustains above 16,200, a pullback formation is likely to continue up to 16,450-165,50 levels.
Independent Analyst Manish Shah also felt Nifty50 is in an extremely oversold state and said there is a high probability of the index reversing sharply from here. “Avoid being heavily on the short side of the market,” he said.
