The index closed the session at 13,817, down 149 points or 1.07 per cent. During the day, Nifty breached its 50-day simple moving average and also tested the 61.8 per cent retracement of the December-January rise at 13,750, a level that later offered some cushion.
“Thursday’s low of 13,713 now becomes the near-term support. Fresh shorts can be initiated once this low breaks. A subsequent target on the downside would be 13,500. On the higher side, the gap area between 13,898 and 13,929 levels will act as a resistance in case of any minor degree bounce,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.
The formation of Doji after a reasonable decline or at the swing low could be a part of a bullish reversal pattern, but is needs confirmation, said Nagaraj Shetti of HDFC Securities.
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“On the weekly chart, Nifty has reached its crucial immediate support at 13,750 (10-week EMA) and is placed slightly higher. Previously, this moving average had offered support to the index during October-November and in December. Hence, Nifty sustaining above this support can open ground for a pre-Budget bounce,” Shetti said.
The 50-day SMA now stands at 13,705.
“It looks critical for the index to defend and sustain above 13,700 level, and a failure to do so shall extend the weakness towards the next logical target of 13,455. If the 13,700 level is defended well, it may trigger a consolidation in the 13,900-13,700 zone, whereas a close above 139,29 level would show signs of strength,” said Mazhar Mohammad, Chief Strategist at Chartviewindia.in.