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Why the market trend remains bearish in the short to medium-term

The last week saw a lot of volatility for the Nifty, which ended the week with a loss of less than one percent. The short- to medium-term trend remains bearish as long as the benchmark index remains below its 200-day moving average. The RSI, a momentum indicator, is declining and undergoing a bearish crossover. The positions of support on the lower side are 16750 and 16500. Opposition on the better quality is set at 17200.

The Bank Nifty index witnessed a fierce battle between bulls and bears and formed a Doji candle that indicated uncertainty. The index’s overall trend remains negative, and when it drops below 39,000, aggressive selling will take place, pushing the index further toward the 38,000-37,500 levels. The bulls will gain strength only after breaking above the 40,000 level, closing basis.

The Clever Monetary Administrations File has fallen beneath the 50 SMA on the week after week diagram, recommending a negative pattern. In addition, the index encountered resistance at the 14DMA prior to a downward correction on the daily chart. The RSI, a momentum indicator, is crossing in a bearish direction. On the lower side, support is put at 17,000/16,700.

The upward resistance level is 17,850.

Throughout the week, aggressive selling pressure from higher levels was applied to Nifty IT. The 30,000 level serves as immediate resistance for the index, which is still in sell-on-rise mode. The index has broken through the rising trend line after crossing its previous swing low. The index could fall to 26,000 levels in the event of a fall.

On the daily chart, Cipla’s stock has formed a bullish hammer pattern, or a bullish reversal candle. The bulls will have some cushion because the stock has found support at its 200-day moving average. From the oversold region, the momentum indicator RSI is exhibiting signs of a reversal. The stock is seen as having support at 850, and a possible upside target is 925 or 950.

Bajaj Finance Because the moving averages are higher than the price, it has been moving lower for the past few days. The 14DMA acted as a barrier against the rising prices on the daily chart. The stock has also fallen below the most recent consolidation. The crossover of the momentum indicator RSI is bearish. The stock may fall further toward 5250 in the near future. At 5800, resistance can be seen on the upper side.

The author, Kunal Shah, works for LKP Securities as a Senior Technical & Derivatives Analyst.

Disclaimer: Analysts’ opinions and recommendations are their own, and 02help bears no responsibility for them.

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