Nifty tests 50-DMA but slips below 30-DMA. What technical indicators suggest
Nifty on Monday almost tested the 50-day moving average of 23,840 as it fell to the day's low of 23,893.70 — courtesy index heavy weights Reliance Industries (RIL), HDFC Bank and Infosys. The 50-stock index, however, fell below its 30-DMA, replicating a rout in most Asian indices.
While it managed to remain above its 50-DMA, 100-DMA, 150-DMA and 200-DMA, its sharp intraday fall dragged it below 5, 10, 20 and 30 DMAs.
The headline index slipped by over 820 points on Monday sliding by 3.3%.
Nifty's fall was largely imported as economic data from the US was hardly inspiring.
«This significant sell-off in domestic equities has been primarily driven by weak global sentiments following disappointing US economic data, particularly non-farm payrolls, manufacturing PMI, and jobless claims, which have raised concerns about a potential economic slowdown in the world’s largest economy,» said Vishnu Kant Upadhyay, AVP, Research and Advisory at Master Capital Services.
Moreover, the yen carry trade has further dampened global sentiment with Nikkei 225 falling by over 12% on Monday. Hong Kong's Hang Seng and China's Shanghai Composite fell up to 1.5%.
Aditya Arora of Adlytick sees a crucial support level at 23,900 as he refrained from predicting the direction of Nifty one way or the other.
«It is very difficult to conclude whether markets will go up or down because it is a news driven environment. So, it is better to follow a level-based approach,» Arora said. «For the market, 23,750 is the support. If the market respects
