Sensex may test 76,300 this week; Nifty can fall another 8% from here on

The near term bias for Nifty is likely to remain negative as long as the index remains below 23,660 - 23,940 resistance zone, shows the technical chart.

Last week, the NSE Nifty 50 index ended below its 50-WMA (Weekly Moving Average) for the first time in 22 months. The bulls and the bears fought a stiff battle around the 50-WMA since mid-November; with the bulls defending this support with all their might in the in-between nine weeks.  However, bears finally won the battle last week as the Nifty settled at 23,432 - down 2.4 per cent for the week; while its 50-WMA stands at 23,660. In comparison, the 200-day Simple Moving Average of the Nifty stands at 23,940. VIEW CHART HERE  Last week, Shriram Finance was the top loser among the Nifty 50 stocks; it tumbled nearly 13 per cent to Rs 532. Trent, NTPC, Tata Steel, UltraTech Cement, Adani Enterprises, Adani Ports and Bharat Electronics were the other major losers - down 7 - 10 per cent each.  On the positive front, TCS, Tata Consumer Products, HCL Technologies, Britannia, SBI Life Insurance and Wipro gained 2 - 4 per cent each.    "Persistent selling by foreign institutional investors (FIIs) due to high valuations, especially in broader markets and global headwinds, has weighed heavily on the markets. The strengthening of the dollar, along with rising US bond yields, has also impacted investor confidence", said Vinod Nair, Head of Research at Geojit Financial Services in a note.  Here's the likely market outlook for the week ahead:  Nifty  Current Level: 23,432  Downside Risk: 8.2%  Upside Potential: 3.9%  Support: 23,263; 22,800; 22,600  Resistance: 23,660; 23,940  The near term bias for Nifty is likely to remain negative as long as the index remains below 23,660 - 23,940 resistance zone. A break above this resistance zone and potentially trigger a surge to 24,350 levels.  That apart, the select key momentum oscillators are showing a negative crossover on the monthly scale for the first-time since November 2023. Thus, implying that the overall trend in Nifty could remain tepid for a longer-than-expected period this year.    On the downside, the Nifty seems on course to drift towards its 20-MMA (Monthly Moving Average) - a key indicator the index has held since July 2022. At present, the 20-MMA stands at 22,270 below which the next significant support stands at 21,515 levels.  Further, since the Nifty seem to have made a lower-high in the recent pullback, the index may slide below the earlier low of 23,263, and thereby confirm the trend of lower-highs and lower-lows on the daily scale. As such, support for the Nifty can be expected around 22,800 - 22,600 levels.  Sensex  Current Level: 77,379  Downside Risk: 2.8%  Upside Potential: 2.4%  Support: 23,263; 22,800; 22,600  Resistance: 23,660; 23,940  With today's likely gap-down opening, the BSE Sensex is expected to break its initial monthly support as per the Fibonacci chart at 77,000-mark. The index is expected to drift lower to 76,300 which is a key support as per the monthly and quarterly chart this week. Break and sustained trade below the same shall open the doors for a likely test of 75,200 levels.  On the upside the Sensex will need to cross and hold above 78,150 levels for hopes of pullback to emerge. As such, a spurt towards 79,200 cannot be ruled out.