Nifty formed yet another bearish candle on the daily chart as the closing was lower than the opening level.
Nifty ended lower for the second consecutive session. Nifty opened moderately higher but volatility saw it extend losses to hit the day's low of 18209 to end the day at 18266.
Nifty has lost more than 300 points in the last two sessions after hitting a record high of 18604 intraday.
correction saw the Nifty slip below the 5 day simple moving average (SMA) of 18333, hinting at a short-term weakness.
Nifty continued to slide for the second day, closing 152 points lower at 18266 on selling across sectors barring bank. Auto, FMCG, metal, and realty indices slipped more than a percent each.
Indices corrected quite meaningfully today led by the expensive side of the market where valuations had got stretched. Almost all sectoral indices ended in the red although PSU banks were seen bucking the trend with investors cherry-picking for value in that pocket. Street is taking note of the cost pressures emanating from higher input costs in companies that do not possess the pricing power.
Nifty continued its slide, which perhaps may be confirming some sort of corrective downswing is in place with a short term top around 18604 level.
Unless it recovers and closes above 18600 level, strength shall not be expected. In case if it defends 18200 level and recoils with a close above 18458 level in the next couple of trading sessions, then some sideways consolidation can be in place.
As the short term trend looks down, further weakness can drag the Nifty towards 18050, where some critical supports are present.
Intraday traders can consider going short below 18200 for a target placed in the 18100/18050 zone with a stop above the intraday high.
Sector Wise :- All the sectoral indices ended in the red. Midcap and smallcap lost 2 percent each.
Bank Nifty outperformed the Nifty, falling 22 points to 39518 and formed a Doji pattern on the daily chart.
A Doji pattern indicates indecisiveness among bulls and bears, as the index seems to have taken support in the bullish gap zone registered on 18th October 21.
Some sideways move with positive bias should be expected unless this counter slips below 39290 level. In that scenario a sideways consolidation between 39300 and 40000 can be expected.
If it fails to hold 39290, then the Bank Nifty can initially slide towards 38670, who advised fresh buying only on a close above 40000.