The 25 basis point hike by the US Federal Reserve (US Fed) seems to have halted the seven session market rally. Is the fall a reason to worry?
Here are key levels you should track for the frontline indices:
NIFTY50: The index closed above the 100- day moving average (DMA) on Wednesday with decent volumes on the daily chart. It made a high of 10,985, which was above its 100-DMA of 10,937, and eventually closed at 10,967. The continuous four-day upward rally has boosted the investor sentiment. The Relative Strength Index (RSI) is trading at 61 while Moving Average Convergence and Divergence (MACD) is in positive crossover above zero line, as per the chart.
A decisive breakout with strong trades above 10,985 will eventually head towards 11,200 in a few weeks, charts suggest. Recently, the index fell below its 50-DMA range, i.e. 11,200 – 11,250, resulting in correction. The same range has now become the resistance for the upward rally.
SENSEX: The index has successfully closed above 100-DMA (36,293) on daily chart indicating further rise on breakout levels. The 36,019 level stays as support, following a recent reversal along with gap up high. The next support comes at 200 DMA located around 35,500 as per the daily chart. The range of 37,500 – 37,300 stays as pressure range, recent breakdown began from the said range. Recently, the MACD made a positive crossover above zero line. The high of 36,555 if broken out upward, may see short covering, chart suggests.
Nifty Bank: The index is heading towards ‘Golden Crossover’ of 50-DMA and 200-DMA as per daily chart. The said crossover attracts more buying interest in banking stocks. The range 27,350 – 27,380 stays as resistance for current trend as it coincides with 50-DMA, the breakdown of recent fall indicated by the chart. The Nifty Bank index has risen 12.80 per cent against 9.80 per cent rise in both the Nifty50 and BSE Sensex since its recent low in November.
Nifty Mid Cap: A previous article on the index highlighted 17,700 as immediate level as per chart which the index honored. The index currently trades around 17,950 which highlights the resistance of 100- DMA located at 17,990. The MACD has recently crossed zero line, indicating a significant positive weightage to the upside. A strong close above 17,950 added with follow-up buying will lead towards 18,480, its 200-DMA as per daily chart.
Nifty Small-Cap: The index on the monthly chart has indicated possible formation of Inverse Head and Shoulder pattern on the closing basis. The 200- Weighted Moving Average (WMA) stays at 6,535 - 1,000 points away from the current levels. The immediate resistance is seen at at 100-DMA located at 6,675 with strong support arising at gap up level of 6,200, chart suggests.