Two back-to-back red candles on the daily chart of the benchmark index indicate a heavy profit booking scenario after a rally of almost 2,000 points in the index.

Nifty50 has formed a Bearish Engulfing candlestick pattern on January 18 and has also given a pattern confirmation by closing below the low of the bearish candle on its next immediate trading session which is January 19, 2022.

In the last couple of trading sessions, both FIIs and DIIs are the net sellers in the market indicating a bear grip in further trading sessions. The index has also formed a bearish alternate shark harmonic pattern on the daily chart and prices have closed below its PRZ (potential reversal zone) levels.

The Nifty50 on the weekly chart has given a bullish pole flag pattern breakout and the throwback of the pattern was awaited. The current fall can be considered as a throwback of the broader pattern which is likely to find support near the upper band of the flag pattern which is placed near 17,500 levels.

A momentum oscillator RSI (relative strength index) & indicator Stochastic has reversed from overbought territory, which suggests bearish to sideways sentiments for the coming days. The indicators on the intraday chart are currently oversold and a sharp bounce back for a limited period cannot be ruled out.

Presently the support for the benchmark index is 17,800 and 17,600 which is supported with 21 & 50-day exponential moving averages and the resistance for the index is capped at 18,300 levels.