Nifty cracks 5% to form large bearish candle again on daily chart. Crude war and coronavirus fear forced the index to break its crucial supports of 10670/10333 level.
Nifty after opening sharply lower at 10742 extended losses and hit an intraday low of 10294. However, some recovery helped Nifty close at 10451.
Nifty moving down further, the short term trend remains down.Nifty could test the recent lows of 10294/10138 in the coming sessions. Any pullback rallies could find resistances at 10637/10744.
Bottom fishing should be avoided until the markets indicate fatigue on the downside. Nifty has tested the weekly 200EMA which is placed at 10378 level. It will be important to watch out for the weekly close on the Nifty. Index is likely to face stiff resistance as and when recovery happens and volatility is likely to remain higher. The immediate resistance zone is placed at 11036 zone.
We expect Indian markets to remain under pressure in the near term since the sentiments are weak on the worries of slowdown across the globe. Investors would continue to monitor crude oil prices, currency movement and the updates on spread of Coronavirus cases as these factors are keeping the markets on edge. On domestic front, inflation data such as IIP and CPI scheduled this week would be on investor’s radar.
In case Nifty fails to hold on to the said level of 10294, the correction may take the index towards 10004 level.
Advised to avoid bottom fishing, as ongoing fall may continue towards 10200 and then 10004 Level.
All the sectoral indices ended in the red, while Midcap and Smallcap indices slipped over 4 percent each.