A Bearish Engulfing pattern, having placed within a broader range movement, is less of a significance, said Nagaraj Shetti, Technical Research Analyst,
“Nifty50 has been showing weak upside bounces after moving up from near the important supports of 16,800-16,900 levels recently. But having rejected from the upper range of 17,300-17,400 levels, the chances of it sliding down to the lower range is higher,” he said.
For the day, the index closed at 17,102.55, down 142.50 points or 0.83 per cent.
On the weekly chart, says Mazhar Mohammad of Chartviewindia.in, the index still looks to be in a consolidation between 17,400 and 16,800 level.
“Nevertheless, Friday’s move not only erased the gains of the preceding trading session but also resulted in a large bearish candle, hinting at the resumption of a downswing. Hence, if the Nifty50 trades below 17,050 levels for at least 30 minutes on Monday, it may revisit the recent corrective swing low of 16,800 levels,” he said while suggesting 17,400 to be a crucial hurdle.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan said the index is oscillating near its key weekly moving averages in the last couple of weeks, which has been developed as a triangular pattern on the daily chart.
“On April 29, the index faced resistance near the junction of the swing high on the daily chart and the 20-DMA ie near 17,400. Thereon the Nifty nosedived towards the end of the session and formed a bearish Outside Bar as well as an Engulfing Bear candle on the daily chart. Overall structure suggests that the index can continue to consolidate in the range of 17,000-17,400 and once the swing low of 16,958 is breached, it can tumble towards 16,600,” Ratnaparkhi said.