The Nifty lost 42 points over the trading session to close at
7748. A bearish day at the markets on Monday as the
indices opened flat but started to loose ground thereafter
breaking one minor support after another to get close to
the 7700 number. The momentum was strongly in favor of
the bears and most of the stocks that underperformed
during the upmove last week were the ones to be hit the
most. Expectedly the Bank Nifty was majorly responsible
for the Nifty downtick.
Technically, the quick turnaround from that resistance of
7840 is now making the case extremely strong for a top
last week. If this indeed turns out to be true then the
indices could remain within a short-term downtrend for a
couple of weeks atleast. Both price and time correction is
likely in this corrective phase unlike the previous
corrections of the last three months. The technical
indicators continue to exhibit weakness while the patterns
on the hourly charts hint at a reversal to be taking place.
The moving averages play an important role in trending
markets and hence will be on test around the 7620 mark.
Above that 7700 is the first point of support breaking
which could have a cascading effect on the price action.
The upside is looking capped to the 7800-7850 zone. The
Bank Nifty has room to fall by more than 3-4%. Overall, the
set-up hints at more weakness ahead.