Markets in doldrums, Nifty just above its trendline support

Indian benchmark indices closed marginally lower with both Nifty and Sensex down by 0.17 and 0.2 per cent, respectively. Broader markets too remained flat to negative.

On the sectoral front, Metal sector shined the most and refrained markets from falling further. Apart from Metal which closed 1.1 per cent up, PSU Bank, Media and IT closed in green. All other banking sectors dragged the markets downwards. Market bias turned negative with 681 advances and 824 declines on NSE. On BSE, 1,257 advanced, while 1,485 declined.

We had talked of 10300 as the major support for the Nifty which is its upward sloping trendline level. The trendline level also acts as a neckline of the kind of Head and Shoulders pattern created on the daily time frame. Nifty resisted multiple time at the 38.2 per cent retracement of the prior downward move from 11171.55 to 10276.30. Finally, the index broke down in last two trading sessions prior to the current session up to the neckline level.

Relatively lower volumes and 14-period RSI lying at 35 levels do not predict any direction for now. Hence, going forward, in case Nifty bounces back, 10420-10495 would act as immediate resistances followed by 10620. On the downside the trendline level of 10315-10300 will act as the support followed by 10275.