Stocks picks of the day: 10,748 level will act as a Great Wall of China for Nifty in case of a breakdown

After forming a ‘Shooting Star’ candlestick followed by ‘Long Bearish’ candle with Open High at the same level indicates a bearish signal and we have witnessed the same during the last two weeks as well.

However, the Nifty has strong support placed around 10,800 level which is at the lower band of the upward rising channel formation in which the Nifty has been trading since many weeks. Besides this, the Nifty has been trading with a strong support placed of 50-weeks moving average which is placed at 10,690 level and 21-weeks moving average support which is there at 11,060 level which suggests positive trend for the time being.

After giving a breakdown of its lower band of the upward rising channel formation on the daily chart, the Nifty plunged more than 750 points as well as has given a close below its 50-days moving average which was placed at 11,342 level which normally indicates a downside movement on a smaller time frame.

We can see a strong support placed at 10,748 level which is a Great Wall of China and the Nifty has been respecting this wall since last two years. A weekly RSI’s reading is at 53.89 level with a negative crossover, though it has a strong support of its upward rising trend line which points out for a bounce back move.