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Sensex (54530) / Nifty (16248)

The escalated geopolitical tension between Russia and Ukraine has sunk the global equity market. Our domestic market was also not spared with this ongoing crisis, and hence we witnessed complete chaos all over. The benchmark index Nifty50 has plummeted nearly 5 percent, probably the biggest single-day fall in many months.

Our market started the expiry day with a massive gap down tracking the global cues, which got aggravated in the latter part. The technical supports were fumed one after another, and no sign of respite was seen throughout the day. The 200 SMA & DEMA both got irrelevant to provide any kind of relief in the market as the benchmark index retained the lower grounds since the opening tick. The way the market fell like a bottomless pit, it has certainly dented the sentiments across the participants. At present, the volatility index, India VIX, has also surpassed the previous high and has clocked the levels of over 33 during the day, which was last seen during the pandemic, showcasing the intensity of the geopolitical concerns. As far as levels are concerned, there is no immediate support visible before 16000 – 15900 and if things worsen, we may see lower levels than this as well. On the higher side now, 16600 – 16800 has now become a sturdy wall and till the time, we do not reclaim these levels with some authority, it would certainly be challenging times for markets. This is possible in the near term only if tension eases off with respect to Russia and Ukraine.

Though considering such scenarios from history, one may infer the situation as an opportunity for investments in selective counters in a staggered manner and not hurry for the ultimate bottom hunting. However, looking at the market scenarios and the volatility index, it is advisable to stay cautious and avoid any aggressive bets for the time being

Exhibit 1: Nifty Daily Chart

Nifty Bank Outlook - (35228)

The Bank Nifty index has seen a strong breakdown of over 5.79 percent amid the ongoing sell-off due to the escalated geopolitical tension. The humongous fall is probably the biggest single-day fall in months. The index breached the 200 DEMA & SMA to conclude the day at 35228 and underperformed the benchmark index.The technical supports were treated just as a number, and the index continued to fall as a bottomless pit. On the technical front, all the indicators have turned southwards as the bears turned on their furious mode. As far as levels are concerned, the previous swing close of 34500 odd levels could be considered as the immediate cushion, however, if things get worse then we might see more downside. The 200 DEMA could now act as a sturdy wall placed around 36200 odd zones on the higher front. The disruptor of technical setup and the influence of the ongoing global crisis, the further movement of the index remains tentative. But since this has to do with geopolitical concerns and such issues are very sensitive and deceptive at times, we would take one step at a time.

Exhibit 2: Nifty Bank Daily Chart

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