Sensex, Nifty: Don't worry about the fall; medium-term trend is intact

The Indian benchmark indices, much like their global peers, have been on a downward slope ever since the US Federal Reserve indicated that it might ease off economic stimulus earlier than previously thought.

The Fed policymakers, on Wednesday, estimated their benchmark rate would rise twice by late 2023, earlier than a previous forecast of no hikes before 2024. The Fed also indicated that it sees the US economy improving faster than expected. Ultra-low rates from the Fed and other central banks have propelled a global stock market rebound from last year's plunge amid the coronavirus pandemic.

On Friday, the benchmark S&P BSE Sensex tumbled as much as 722 points in intra-day deals. At 1 PM, the index had pared some losses and was trading 323 points lower at 52,000. The broader Nifty50 index, meanwhile, fell below 15,600-mark.

Here's how the benchmark indices look on technical charts

 
S&P BSE SENSEX

Likely target: 52,700 and 53,000 (after a close above 52,300)

Upside potential: 0.76% and 1.34%

The overall trend on the index is bullish as long as the support of 51,000 is held firmly. The recent move may show signals of distribution. However, the underneath trend is intact with immediate support coming at 51,500 and 51,300 levels. Going forward, if the index manages to sustain above 52,300 levels, the upside bias may regain positive momentum, as per the daily chart. The trend may further lead to 52,700 and 53,000 levels. CLICK HERE FOR THE CHART

NIFTY50

Likely target: 15,900 and 16,100

Upside potential: 0.90% and 1.50%

Until the index is trading above the medium-term support of 15,200 levels, the upside bias is expected to regain momentum. The current trend may show a minor selling pressure with the Relative Strength Index (RSI) exiting overbought territory, yet it has supports at 15,400 and 15,320 levels. The index may revive strongly after showing sustainability above 15,750 levels, and this may lead to 15,900 and 16,100 levels, as per the daily chart. CLICK HERE FOR THE CHART