After showing a promising upside bounce from the lows on Tuesday, Nifty slipped into a sharp weakness again on Wednesday and closed the day lower by 159 points. After showing minor upmove in the early part of Wednesday, the Nifty was not able to move back into the green for rest of the session. Intraday minor upside recovery attempt has been used to sell on rise for the day.
A long bear candle was formed, which is placed at the support of 11700 levels This indicate a lack of respite for bulls, after one day of upside bounce. Now, the lower 11650 is going to be a crucial support area for the market and if this support breaks decisively on the downside, then one may expect sharp downside momentum in the near term.
At the same time, formation of reversal patterns at the highs or a long bear candles have failed to bring sharp follow-through weakness in the market in the recent past. Now it is going to be important to watch market behavior for the next Thursday and Friday. As of now, the broader high low range is intact for the market around 12025-11700 levels and a sustainable move beyond the range could mean pick up in sharp momentum on either side.
On the weekly chart, the Nifty is placed above the important support of long term trend line at 11600 levels, as per the concept of change in polarity. Previously, Nifty has displayed a sharp momentum on either side, during its movement above and below this trend line in the last three months. Hence, a move below 11600 levels is likely to open a sharp weakness in the market.
Conclusion: The market struggled to sustain the gains made on Tuesday and signal dicey outlook ahead. Any sustainable move above 11600 levels could bring bulls back into action towards 11900 levels. A decisive move below 11600 could mean a sharp downside breakout in the market. Important lower support is placed around 11650-11600 levels and immediate resistance is now placed at 11850.