Technical View: The Nifty50 forms a bearish candle, indicating that consolidation is likely.

The Nifty50 index was under pressure for the third day in a row, closing half a percent lower on October 21 despite having recovered more than 100 points from the day’s low in the final hour of trading on the previous day.

The market was dragged down by stocks in the information technology, metals, and fast moving consumer goods sectors, but buying in banking and financials and auto stocks limited the downside.

The index began the day higher at 18,382.70, but fell to a low of 18,048.00 by the end of the day

Because the closing price was lower than the opening price, the Nifty formed a bearish candlestick. Experts believe that if the index holds at 18,050, there will be consolidation in the near future.

The best strategy for the time being, according to Mazhar Mohammad, chief strategist – technical research and trading advisory at Chartviewindia.in, is to keep it neutral for the duration of the day.

The Nifty50 forms a bearish candle, indicating that consolidation is likely.
The Nifty50 forms a bearish candle, indicating that consolidation is likely.

Everyday traders with a high risk appetite should consider shorting below 18,040 and targeting 17,960 as their target, according to the expert.

In this case, the Nifty registered a Three Black Crows bearish formation, but according to Mohammad, in a perfect pattern, the second and third day of bearish candles open at or around the midpoint of the preceding sessions, and in this case, the second-day pattern failed to meet that condition.

On October 13, the Nifty appeared to have found some support around 18,050, as it entered the bullish gap zone of 18,050 –18,008, which had previously been established.

Bank Nifty is a stock market index that measures the performance of banks

The bank index appears to have saved the day for the bulls, outperforming the Nifty and reaching a new high of 40,200.45 in the final hour of the session, driven by a number of private and public sector banks, according to the data.

On the daily chart, the index formed a bullish candle as it gained 512 points, or 1.3 percent, to close at 40,030.20, crossing the 40,000-point threshold for the first time in its history.

Havells, L&T Finance Holdings, Berger Paints, Asian Paints, Deepak Nitrite, Pidilite Industries, Voltas, L&T Technology Services, IEX, Hindalco, Polycab, Ambuja Cements, Infosys, Hindustan Aeronautics, Jubilant Foodworks, and Tata Steel were among the companies that experienced weakness.

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