The markets encountered a notable sell-off on Wednesday, retracting sharply from an initially positive opening. The Nifty index particularly faced a significant downturn, concluding near its day's lowest point by losing 302.95 points or 1.41 percent, settling at 21,150.15.
Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities, noted that broader market indices like the BSE Mid Cap and Small Cap indices experienced greater declines, showcasing an underperformance compared to the Sensex/Nifty.
Analyzing the technical aspects, Gangadharan highlighted the Nifty's breach of its previous support at 21,337 and pointed out a negative moving average crossover, with the 20-period MA dropping below the 50-period MA. Additionally, momentum indicators like the 14-day RSI plunged from overbought levels, indicating a loss of momentum and signaling a short-term downtrend for the Nifty.
Anticipating potential future movements, he suggested that once the immediate support of 21,087 is breached, the Nifty might further decline towards significant supports at 21,026-20,769. Gangadharan also emphasized potential resistance around 21,300 for any upward movements.
Rupak De, Senior Technical Analyst at LKP Securities, remarked on the Nifty's sharp correction due to persistent bearish sentiment, particularly after its inability to sustain above 21,500. This resulted in increased call writing at the 21,500 strike, contributing to a substantial downturn.
Though the Nifty briefly dipped below 21,100 before recovering to close above that level, De suggested a potential consolidation phase in the near term. He projected resistance around 21,500 and support around 21,100 for upcoming market movements.
(With Agency Inputs)
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