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Nifty Slips Below Key Long-Term Support Level

The 200-DMA for the Nifty is currently placed at 11,164 points.

The CNX Nifty logo is displayed on a wall at the National Stock Exchange (NSE) in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
The CNX Nifty logo is displayed on a wall at the National Stock Exchange (NSE) in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

The NSE Nifty 50 Index today breached below its 200-day moving average for the first time in over a year.

Nifty Slips Below Key Long-Term Support Level

Moving averages are widely used in technical analysis and it smooths out the price action by filtering the noise. It is a lagging indicator as it is based on past prices. Shorter period moving averages are used for short-term trading, while longer period moving averages are used by long-term investors.

The 50-stock index slipped below the threshold level being watched by the longer-term investors. The 200-DMA for the Nifty is currently placed at 10,164 points.

However, Shrikant Chouhan, vice president (technical analysis) at Kotak Securities, advised selling the Nifty below 10,140, around which the index had hit its previous low on March 7. If the Nifty breaks below these levels, then chances of breaching the key 10,000-mark would be strong, he added.

Concurs Ruchit Jain, techincal analyst at Angel Broking. He also believes that 10,141 would be the key level as a slide below this crucial junction would reinforce the selling pressure in the market. Angel Broking has a negative stance on the Nifty and expect sub 10,000 levels.

“Going ahead, the Nifty is likely to challenge its February low levels of 10,141, resulting in extended consolidation towards key value area of 10,000-9,900 in coming weeks,” said Dharmesh Shah, head-technicals, ICICI Securities. On the higher side, the Nifty has major resistance near 10,450, he added.

(Corrects Dharmesh Shah’s surname in a previously published version.)