In the last technical column dated 24 February, we had articulated that the Nifty50 has formed a bearish “Island Cluster Reversal” candlestick pattern on the daily charts and therefore one should remain bearish for the markets.

Our view was vindicated as the Nifty fell by over 1,300 points or 12 percent during the last fortnight. The Nifty50 nosedived 5 percent on Monday to close at 10451, the highest fall in percentage term since 24 August 2015.

The Nifty50 falls to a 17-month low to close at the lowest level since 01 November 2018. Global stocks plunged as crude oil prices tumbled over 30 percent after Saudi Arabia launched a price war with Russia and Coronavirus (Covid-19) fears triggered another round of across-the-board selling in the world equity market.

The Nifty50 tested its 2000-week SMA and EMA during Monday’s session. At present, 200-week SMA and EMA are placed at 10,302 and 10,378 respectively.

Below a 200-week moving average, support for the Nifty is seen at 10150, derived from the trend line, adjoining the previous two bottoms 9,952 (March 2018 Bottom) and 10,004 (Oct 2018 bottom).