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Below the Quote on Market Analysis by Mr. Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.

Markets plunged lower and lost ~1.5%, after spending nearly a week in a narrow range.   After the initial uptick, Nifty drifted gradually in the initial hours however the pace of decline intensified as the day progressed. Eventually, it settled closer to the day’s low at 21,997.70 levels. The selling pressure was widespread wherein metal, realty and energy lost over 5% each.  The broader indices extended their prevailing bias and lost in the range of 4%-5%.

It is a double whammy for participants as Nifty has slipped below its immediate support of short-term moving average i.e. 20 DEMA and also breached the trendline support while midcap and smallcap space are already under tremendous pressure. We suggest maintaining negative bias in the index now and utilizing rebound to create short positions. At the same time, traders shouldn’t add to their loss-making positions and prefer index majors over others.  

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