Hot Stocks: Bullish Belt Hold pattern suggests strength in Mahanagar Gas

Rising cases of coronavirus in India and weak global sentiments pushed benchmark index Nifty lower towards 11,000 mark. Bears took complete control of the index as it closed below 11,000 psychological mark after developments around Yes Bank.

Markets continued to extend its losing streak for the fourth straight week as index fell almost 2 percent in the week ended March 6.

Recently, Nifty broke out from an inverted cup and handle pattern from its neckline (11,625) to reach the target of 10,900 last Friday. This concluded the technical downside and chances of bouncing back cannot be ignored.  Also, the middle line of Andrew pitchfork drawn from swing highs is also coming near 10,900 levels and a majority of times, prices halt near the middle line which is also hinting strong support near 10,900 mark.

Moreover, 5 weeks EMA is trading around 11,550, and as long as Nifty is trading below these levels, one should trade with sell on rise strategy. However, the index has given a fall of 1,200 points in the last 2 weeks which has put majority of the oscillators in oversold zone and relief rally towards unfilled gap territory (11,450) cannot be ruled out.

A decisive close below ascending trend line support around 10,900 can drag index towards swing lows (10,650) on the downside; however fresh positional shorts should be restricted, as the index is quite oversold.