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The Indian equity market extended its losing streak for the second consecutive week.

Nifty has formed an island reversal formation on the daily chart post completing its 50 percent retracement of the entire fall, which is hinting that the index has formed short term top near 9,900 levels.

Nifty had earlier negated the formation of a higher top and higher bottom pattern and now it has started making a lower top and lower bottom on the daily chart.

The immediate resistance of the previous top is now placed near 9,600 levels. So, as long as Nifty trades below these levels, every bounce should be utilized as a selling opportunity.

On the daily chart, Nifty has also formed head and shoulder patterns where the neckline is placed near 9,050 levels.

If the index breaks below the said level decisively, then we can expect further downside towards 8,500.

MACD oscillator has provided fresh sell crossover on the daily chart. The momentum indicator RSI has also slipped below 50 levels and shows that Nifty is losing its strength and we may see further selling pressure going forward.

The volatility index India VIX remained unchanged near 38 levels. Due to recovery from the lower levels, it has formed a dragonfly Doji candlestick pattern on the weekly scale which is a bullish reversal candle.

So, we may expect a spike in the volatility index in the coming week, which will create some pressure on the index.