Nifty formed a bearish candle and recorded a fresh breakdown as the index was not able to hold Friday the 13th’s march low of 8555 and formed a Long Black Day candle on the daily chart.
Nifty opened in the positive territory to record an intraday high of 9127, but succumbed to profit booking within a few minutes, falling consistently for the rest of the session. It touched an intraday low of 8407, but managed to recover slightly to close at 8468.
Nifty opened in the green but failed to hold onto the gains and extended losses for the remaining session amid mounting coronavirus worries and recession scare.
Nifty needs to consolidate above 8400 to prevent further damage, as a breach of this level will drag down the index into the 7945 /7893 zone.
On rallies, the 8900 /9130 zone can act as an initial hurdle and unless this zone is cleared, upside strength should not be expected.
The novel coronavirus is weighing heavily on investor sentiments around the world as Dow Jones futures fell 800 points and Asian and European markets saw sharp corrections. Our market is feeling the heat too as the number of reported cases jumped to 147.
While on rallies, the zone of 8900/9130 can act as an initial hurdle and unless this zone is cleared, upside strength shall not be expected.
As markets are witnessing accelerated selling pressure despite being in deeply oversold levels, investors are also advised to wait for some sort of consolidation around the particular level before nibbling into the stocks once again.
No level seems to be sacrosanct enough to halt the selling pressure.
All the sectoral indices ended in the red. Midcap and Smallcap indices fell 4 or 6 percent.
- Someshwar, Technical analyst, Equidius Research