Resistance continues to be at 17,240–17,210

Nifty forms a Bearish engulfing pattern and fails to sustain above 50 MA as it closes lower at 17,117.60.

The Importance of the price was seen playing out today as in the previous session Nifty closed a tad above 50 MA, an attempt was seen to inch high but selling pressure was visible from the start of the day.

Nifty closed lower shredding almost a per cent while losers were FMCG, Infra, and consumption.

This was amid high volatility as Vix is up 9 per cent at 24+ levels. A bearish engulfing is a very strong two-day Bearish reversal pattern that indicates the strong presence of bears. Usually, after a decent run-up, an engulfing pattern indicates or signals the exhaustion of bulls and a warning that current correction can further be extended to lower levels upon confirmation.

It is very important for bulls to hold lower supports of 17,000 – 16,950 else a selling pressure can weaken this current bull run and we may be into a short-term correction. Resistance continues to be at 17,240 – 17,210. Our stance on benchmark remains cautious and only a close above 17,340 will make our view bullish.

(The author is Technical Analyst at Finvesify)