Sensex may slide to 50,000; Nifty may dip below 15,000, tech charts suggest

Similarly, the Bank Nifty may shed another 7 per cent to 30,500-31,000 levels.

The key benchmark indices plunged sharply in trades on Monday, taking cues from the Asian counterparts and SGX Nifty, as Brent crude surged past the $130-mark as the Russia-Ukraine war took its toll. Investors are worried about higher inflation and steeper rate hikes going ahead as a fallout to the sharp rally in crude oil prices.

As of date, the BSE Sensex and Nifty 50 had shaved-off 15 per cent from their respecitive historic highs. The all-time high for Sensex was 62,245 and for Nifty 50 18,604; both levels were claimed in October 2021.

According to analysts, the Russian invasion of Ukraine and likely lower exports of Russian crude oil are likely to keep crude oil prices elevated for a protracted period. 

"We estimate the Indian economy to incur an additional US$70 bn burden (1.9% of GDP) versus FY2022 levels at an average crude price of $120/bbl. Also, we see meaningful upside risks to inflation and downside risks to corporate profits through increased pressure on margins and volumes both," wrote analysts at Kotak Securities in a recent report.

Given the geopolitical events and soaring crude oil prices, here is the outlook for benchmark indices ahead.
 
S&P BSE SENSEX
Likely target: 50,000
Downside potential:  5%

Every weakness below 56,000 and its inability to overcome this hurdle has shattered the bullish strength. Now, as we move lower with over 2 per cent gap-down on Monday, the sell-off could intensify, if the index does reverse in the remainder of the week. The immediate resistance for the BSE benchmark now comes at 54,000-level, with further weakness signalling downside to 50,000 on track. CLICK HERE FOR THE CHART
 
NIFTY50
Likely target: 15,000
Downside potential:  5%

Last week, the NSE benchmark closed below the 50-weekly moving average (WMA) for the first time since mid-2021. In do so, the Nifty has sent negative signals. A gap-down opening of over 350 points or 2.33 per cent on Monday further underlines the negative sentiment. The weakness or if you say bearishness, is here to stay a bit longer. The resistance for the Nifty now comes at 16,200 and 16,500 and as long as we trade below 16,800 level, the bears are likely to dominate the proceedings. The index may slide to 15,000-mark.  CLICK HERE FOR THE CHART

NIFTYBANK
Likely target: 31,000 – 30,500
Downside potential:  7%   

If the Nifty Bank index fails to cover the current gap-down range of 34,094 to 33,543 during the entire week, then we would probably see a continuation of sell-off for the next few weeks.  At current situation, the next crucial support falls at 31,000 – 30,500 levels, its previous support and accumulation range seen in early 2021. The resistance comes in the range 34,700 to 34,200 levels.  CLICK HERE FOR THE CHART