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Our markets started the week on a sluggish note on Monday as uncertainty with respect to Russia and Ukraine was still looming over. Due to this tentativeness, the volatility increased a bit and Nifty kept flirting with the key support zone of 17000 – 16800 for nearly three sessions. However on Thursday, Russia finally invaded its neighboring country which had a complete outburst of fear across the global financial markets. We were certainly not spared with it and as a result, the Nifty first opened with a massive cut and as the day progressed, the sell off aggrandized to thrash all immediate supports one after another. Before anyone could realize, Nifty slid to 16200 which was the lowest level in last seven months.  

Things looked extremely bleak at one point but fortunately globally there was some relief and hence, our market too had a sharp recovery on Friday to recoup some portion of losses. Despite this, Nifty ended the week below 16700 with a cut over three and half a percent to the previous weekly close. Taking a glance at the daily time frame chart, we can clearly see Nifty breaking below the sacrosanct moving average of ‘200-SMA’ placed around 16900. Since this has happened with a ‘Breakaway Gap’, traders would continue to have challenging times till the time we do not reclaim 16800 – 17000 with some authority. This is possible in the near term only if tensions eases off with respect to Russia and Ukraine. Till the time this does not happen, we are not completely out of the woods. On the flipside, 16400 followed by 16200 are to be seen as immediate supports but if things worsen from here, we will not be surprised to see Nifty sliding below 16000 as well.

Let’s see how things pan out going ahead and since the volatility is likely to remain on the higher side, traders are advised not to get carried away by one day bounce. Rather its advisable to keep a regular tab on all these developments and better to stay light on positions. Whether market extends the correction in sub-16000 terrain or not, the time will tell; but in case if it happens, it would certainly be an excellent opportunity for investors to accumulate quality propositions in a staggered manner. 

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