Nifty below 200 days EMA support, breaches 10,000 mark

Though Indian benchmark indices are grasped with the negative sentiments and biases, we were hoping for a support at 10,000 mark, (specifically between 10075-10030) for the Nifty. However, on the last day of the week, Nifty opened with a gap-down of 146 points at 9968.80 levels and stayed more or less at the same level without putting much efforts for a bounce back to fill the gap.

Even the broader markets dropped with the similar intensity where mid-cap and small-cap indices lost 1.4 and 1.5 per cent, respectively. On the sectoral front, Realty and PSU Banks were at the forefront of the move and moved southwards losing 3 per cent plus each. Barring IT and Media, which grew marginally, all other sectors ended in the red.

Coming back to the technicals, the index had witnessed an upward sloping trendline breakdown at 10,360 levels on March 6, followed by a pullback up to the trendline level on March 13. Nifty dropped for three consecutive trading sessions thereafter and witnessed a short covering of up to 38.2 per cent retracement of the prior downward rally. On Friday, Nifty broke down from the 10,075-10,030 range and stayed there on a closing basis.

Now Nifty is trailing below its 200-days EMA support level of 10,114. It has just touched our next major support at 9,955. Going forward, we hold 9,685 as a major support which would also act as provisional trend reversal. Till then 9,850-9,775 will acts as the immediate support levels. As Nifty closed above 9,955, if it gives a bounce back from here, we hold 10,105-10,225 as new normal.