Bears strong again on Nifty; above 15k ensures upswing

THE stock markets across the world crashed with geopolitical tensions. The US strikes on Syria dismantled the positive sentiments in the markets. The Indian stock markets also crashed by 3.76 per cent. All the components of the benchmark index, the Nifty, closed in negative territory. It fell by 568.20 points and settled at 14,529.15. BFSI sectoral indices fell by almost five per cent. Almost every sector registered over two percent losses. The Volatility index, India VIX is up by 22.93 per cent and closed at 28.14. This is the highest level after March 2020. Overall market breadth is hugely negative as 1324 declines and only 571 advances.

Technically, the Nifty got the confirmation to the last week's bearish engulfing by closing below the prior week's low. It also closed below the previous swing and indicated that the short term top made at 15,431. The last couple of days of winnings have been erased. This is the biggest one day fall after 21st December. As we keep mentioning about the overstretched market, it retraced to the critical support levels. The Nifty retraced by 50 per cent of the 29th January -16th February swing.

Now the key channel support is placed at 14,315. Before that, the 50DMA support is at 14,445. The Nifty almost tested it today. Earlier, it took the support at 50DMA or after one or two days of breach, and it bounced back to the news highs. Let us wait to see whether this time also this short to medium term support holds. For next week 14,444 –14,315 will act as a solid support zone. Only below this, the market condition will change to bearish. To resume the uptrend, the Nifty needs to close above Thursday's high of 15176. The bearish momentum has increased, and finally, the bears got a grip on the market. Even the FII selling began as the US Bonds, and the Dollar index is rising. In case the geopolitical tensions escalate, the market may turn bearish.

(The author is a financial journalist, technical analyst, trainer, family fund manager)