Technical Analysis

WHAT LIES AHEAD : NEAR-TERM PICTURE 

SPOT NIFTY : The market experienced one of the worst weeks in recent times due to global recession fears and a series of rate hikes by various central banks. In the last five trading sessions, Nifty declined 791 points or 4.49 per cent. All the intraday pullbacks were also sold into. Nifty is now 0.78 per cent below the 200-DMA. It has also slipped below the crucial Anchored VWAP support. Now, the 50-DMA has entered a downtrend. The fresh week opened with a big gap-down and sustained below the gap area. Three consecutive strong weekly bearish candles show that the market is under a complete bear grip. The weekly RSI also declined below the 50 zone. The daily moving average ribbon is in a downtrend along with the MACD line, which is below the zero line and is negative for the market. The six-distribution day count and the fact that it's trading below the long, as well as short-term averages, means that the market is in a confirmed downtrend. After the double top pattern breakdown with a distribution day, it retested the breakdown level and declined sharply lower. Wednesday's Doji candle failed to get positive confirmations. Though Nifty opened with a positive gap, it ended up with a strong bearish bar. The 200-DMA acted as a strong resistance for the second successive day. Now, every technical parameter and setup is showing a bearish phase. Any bounce has to sustain above the gap area or the 50-DMA of 17,410 for a bullish reversal. Nifty needs to close above the previous day's high for a short-term bounce.