No need to worry till the Sensex holds 56,886 level, technical charts say

Equity markets declined the most in around a month on Monday following US Fed chief Jerome Powell's comments on Friday, which indicated that it will continue with its restrictive monetary policy

Equity markets declined the most in around a month on Monday following US Fed chief Jerome Powell’s comments on Friday, which indicated that the central bank will continue with its restrictive monetary policy. 

Sensex tumbled 1466 points or 2.50 per cent to 57,357 levels, whereas Nifty shed around 400 points or 2.10 per cent to 17,188 in intraday trade on Monday. 

Here’ the outlook for key benchmark indices:

S&P BSE SENSEX

Outlook: 58,700 will be the trend deciding level

While the Sensex experienced a pullback close to the April high of 60,845 level between July and August, the underlying trend provides a cushion to the 200-day moving average (DMA), charts suggest. As long as the support of 56,886 mark, its 200-DMA is defended on a closing basis, the Sensex may see a rebound. Monday's fall presents an opportunity to buy stocks at lower levels, shows the daily chart. The immediate hurdle for the Sensex is at 58,700 levels, which the index needs to hold on a closing basis to gain further ground. CLICK HERE FOR THE CHART

NIFTY50

Outlook: Watch out for 16,975 levels

Over the last 12 sessions, the overbought category of Relative Strength Index (RSI) saw the index gain considerable ground. Although, the sentiment will be decided more by global cues, the index is still holding above the key support area. Until the Nifty50 successfully defends 16,975 level, its 200-DMA, the bullish bias shall prevail. The immediate barrier for the index comes at 17,500 levels.  CLICK HERE FOR THE CHART

NIFTYBANK

Outlook: Resistance comes in at 39,000 levels

Among the key indices, Nifty Bank is the only index that not only crossed its April high, but also conquered the February peak. The momentum is good and technically, every dip around support levels provide opportunities to buy. The immediate support is at 37,200 levels, followed by the 36,300 mark, which is its 200-DMA. Resistance comes in at 39,000 level, according to the daily chart. CLICK HERE FOR THE CHART

NIFTY IT INDEX

Outlook: Hurdle at 100-DMA

Nifty IT index did show courage to revive after tumbling 30 per cent in the last five months from the historic peak of 39,446. However, the positive up move of 15 per cent sees hurdle at 30,300 mark, which is the 100-DMA. Only a decisive close over the moving average can see the index embark a new trend. Till then, the 27,000 shall act as a cushion. Even the Moving Average Convergence Divergence (MACD), a technical momentum indicator, formed a negative crossover, reflecting selling pressure on every rise.CLICK HERE FOR THE CHART