Tech View: Nifty50 forms a ‘Double Inside Bar’ as poll jitters grip market

TRADENIVESH: Nifty50 ended almost near the day’s low on Wednesday, as traders turned jittery ahead of the first phase of voting in general elections on Thursday. The index ended up forming a ‘Double Ins ide Bar’ on the daily chart.

The day saw the NSE barometer hitting a low of 11,571, which corresponded with the 13-day exponential moving average. Going ahead, this level will offer support to the index, while the 11,680-11,710 range will act as immediate resistance.

"The index tested the upper end of the distribution triangle on the hourly chart. After a brief distribution near the hurdle zone in the first half, the index nosedived in the second half. The index has formed a Double Inside bar. The breakout level for this pattern on the downside is at 11,549, while the hurdle zone is at 11680-11,710,” said Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan.

The initial target area on the downside is at the junction of the 40-day exponential moving average and the daily lower Bollinger Band i.e. 11,300, Ratnaparkhi said.

For the day, the index fell 87.65 points, or 0.75 per cent, to 11,584. Once the bears manage to push the indices below the 13-EMA, whose value for the next session is placed at 11,57, the near-term trend may decisively favour the bears, who should eventually succeed in pulling down the index towards the 11,300 level.

“Traders are advised to consider fresh shorts once Nifty closes below the 11,549 mark and look for much lower targets whereas no strength is expected on the upside unless Nifty manages a close above the 11,710 level,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in

Aditya Agarwala of YES Securities said a close beyond the 11,760 level will resume the uptrend, taking the index higher towards the 11,820-11,890 zone.

“Within this range between 11,550 and 11,760 levels, buying can be done close to the lower end of the range i.e. 11,550, for targets of 11,680 and 11,760. Selling can emerge around the 11,760 level for downside targets of 11,650 and 11,550,” he said.