The domestic stock market plummeted on Monday as investors reacted to higher tax burden on FPIs and rise in short-term and long-term capital gains tax incidence. While breaching several supports, Nifty ended with a loss of 252.55 points or 2.14 per cent at 11,558.60.
The 50-stock pack, which lost 385 points in the last two days, now has higher chances of a sharp technical pullback. The low point of Monday has tested the confluence area where three vital supports exist. The 100-DMA exists at 11,494, and the zone of 11,500-11,550 is the place where one horizontal support line exists and also the rising trend line that is drawn from the 11,000 level coincide. Therefore, the region of 11,495-11,550 is a very crucial support area for Nifty in the near term.
Tuesdays session may see market taking a breather and attempt to pull back a bit. Any weakness is highly expected to find support at the 100-DMA level, which is at 11,494.
The upcoming session will see 11,630 and 11,690 levels act as next resistance points. Supports may come in at 11,495 and 11,450.
The Relative Strength Index (RSI) on the daily chart stood at 38.8041 and it has marked a fresh 14-period low, which is bearish. The daily MACD has crossed below its signal line, and is also bearish after this negative crossover.
A falling window emerged on the candles. Such a formation necessarily results out of a gap on the downside and often means the continuation of the move.
However, the market correcting so fast is in a way better than some steady downsides that may last for several days. Though it would be very early to predict a bottom at the current levels, it is liRead More – Source
[contf]
[contfnew]
ET Markets
[contfnewc]
[contfnewc]
