scorecardresearchTechnical Wrap: Nifty breaks crucial support of 17,600; analysts see market texture turning volatile

Technical Wrap: Nifty breaks crucial support of 17,600; analysts see market texture turning volatile

Updated: 12 Apr 2022, 05:10 PM IST
TL;DR.

  • Nifty Realty fell 2.76 percent while Nifty Metal and Oil & Gas fell 2.74 percent and 2.37 percent respectively. Media, IT and PSU Bank indices fell over a percent each. Nifty Bank index rose 0.36 percent.

The market is under pressure on account of Inflation worries ahead of the India and US inflation data release.

The market is under pressure on account of Inflation worries ahead of the India and US inflation data release.

Nifty ended in the red for the second consecutive session on April 12 as weak global cues, elevated inflation and concerns of a slowdown in consumer spending following a rise in fuel prices ahead of earning seasons hit investors' sentiments.

Nifty opened at 17,584.85 against the previous close of 17,674.95 and touched intraday high and low of 17,595.30 and 17,442.35 respectively. At the end, the index was 145 points, or 0.82 percent, lower at 17,530.30.

Among the sectors, Nifty Realty fell 2.76 percent while Nifty Metal and Oil & Gas fell 2.74 percent and 2.37 percent respectively. Media, IT and PSU Bank indices fell over a percent each. Nifty Bank index rose 0.36 percent.

The market is under pressure on account of Inflation worries ahead of the India and US inflation data release.

"Investors are advised to maintain liquid cash in hand to take advantage of any falls in quality stocks due to poor performance in quarterly results. We expect some volatility in the market on account of weekly expiry," said Rahul Sharma, Co-Founder, Equity 99.

Technicals

Nifty, after the gap-down opening, broke 17,600, the crucial support level. Realty and metal indices shed over 2.5 percent each whereas banking stocks recovered sharply from the day's lowest levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, observed the benchmark index has closed below the 10-day simple moving average (SMA) after a long time.

"We are of the view that the broader market texture is still weak and any fresh uptrend rally is possible only after 17,620 breakouts. Below these levels, we could see further weakness till 17,400-17,350. If Nifty succeeds to trade 17,620 then it will move up to 17,700 and 17,800. The market texture is volatile, hence, level-based trading would be the ideal strategy for the traders,” said Chouhan.

As per Sharma of Equity 99, the level of 17,400 will act as strong support for Nifty. If this is broken, we might see Nifty touching the 17,310 level and if this level is also breached then the next stop will be around 17,260. On the upside, 17,650 will act as strong resistance. If Nifty goes beyond this level, then the next stop will be around 17,800, which if breached, will take markets to the 17,990 level, said Sharma.

Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said if the Nifty sustains above 17430, some sideways consolidation with positive bias can be expected. To regain strength, the index needs to bridge today’s bearish gap present in the zone of 17,595 and 17,650 levels, he said.

"Going forward, sustaining above 17,440 remains critical as a breach of this level on a closing basis may lead to the test of its 200-day moving average at 17,150. For the time being, it looks prudent to remain neutral on the index trades," said Mohammad.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

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First Published: 12 Apr 2022, 05:10 PM IST