Nifty, MidCap, SmallCap: Should you buy the dip? Here's what charts say

The NSE Nifty50 has strong supports placed around at 20,920 and 20,750 levels. Meanwhile, the broader indices are seen testing support at respective 20-DMAs, show charts.

The NSE Nifty50 index tanked as much as 2.9 per cent from its new summit at 21,593 hit on Wednesday, to a low of 20,977 this morning. Prior to this, the Nifty had rallied over 14 per cent in the last two months. Hence, some profit-taking following the smart gains seemed warranted.

In comparison, the broader indices took a sharper hit. The NSE Nifty MidCap index tanked 4.7 per cent, while the SmallCap index plunged 6.7 per from its peak.

Given the sudden fall, you as an investor should be worried or look to buy the dips?

Here's what the chart suggest

Nifty

Current Level: 21,130

Support: 20,920; 20,750

Resistance: 21,350; 21,450

Amid this current fall, the Nifty50 today came within striking distance of the super trend line support at 20,920 levels. The index has managed to sustain above this indicator since mid-November. That apart, with today's fall the index has now filled the gap created just below 21,000 last week.

Further, the overall bias continues to remain positive as the index holds above key moving averages. However, the index may consolidate and exhibit volatility in the near-term as key momentum oscillators on the daily charts have turned negative. The 14-day RSI (Relative Strength Index), Stochastic Slow and Directional Index have turned negative. The MACD (Moving Average Convergence-Divergence) too is on the verge of turning negative.

Having said that, the Nifty may seek support around its 20-DMA (Daily Moving Average) which presently stands at 20,750. 

In future, the Nifty may look to fill the huge gap created earlier this month, between 20,060 and 20,500. As long as the Nifty sustains above the 20,000-mark, the long-term trend is likely to remain positive.

Going ahead, pull-backs from current levels, may face resistance around 21,350-21,450 range. CLICK HERE FOR THE CHART

Nifty MidCap

Current Level: 44,250

Support: 44,065

Resistance: 46,000

After dipping below its 20-DMA in intra-day deals, the Nifty MidCap index is seen clawing its way up above the key moving average. However, since the key momentum oscillators are all in favour of a downside, the index may find it difficult to sustain above the 20-DMA, which stands at 44,065.

Upside, if any, seems to be capped around 46,000-mark, shows the daily chart. On the downside, sustained trade below the 20-DMA can trigger a fall towards the 50-DMA at 41,770-odd levels. CLICK HERE FOR THE CHART

Nifty SmallCap

Current Level: 14,575

Support: 14,430

Resistance: 15,130

Similar, to Nifty MidCap index, the Nifty SmallCap too is seen bouncing back after dipping below its 20-DMA. The upside for the SmallCap index seems capped around 15,130 level - suggests the super trend line indicator.

On the flip side, sustained trade below the 20-DMA, which stands at 14,430, could trigger a slide towards 13,650 - its 50-DMA. CLICK HERE FOR THE CHART