Sensex, Nifty headed towards 100-WMA; more pain ahead for markets?

The 100-WMAs hold the key for the Sensex and Nifty; Only a decisive breakdown of the same could mean medium-term bearishness for the benchmark indices.

The Indian equities opened with a major gap-down on Monday tracking weak global cues as soaring US inflation triggered fears of steeper rate hikes by the US Federal Reserve.

Last week, the markets had reversed their three-week rally with over 2 per cent weekly fall. A massive gap-down on Monday has now further dented the investor sentiment. 

Going forward on the basis of technical charts here's what one can expect the benchmark indices to do:

S&P BSE SENSEX

Likely target: 51,249 (after breaking 52,246)

Downside potential: 2%

While the BSE benchmark trades well above the previous reversal mark of 52,260, the sentiment and fear over varied market-related aspects have put investors on the backfoot. If the Sensex violates 52,260-level, then it would form a "Lower High, Lower Low" formation, inevitably signalling further downside. The next immediate support for the index exists at 51,249 level, which is its 100-weekly moving average (WMA), where the market might find some common ground to stand at least for some time. The resistance for the index now comes at 54,500. CLICK HERE FOR THE CHART

NIFTY50

Likely target: 15,318

Downside potential: 2%

After logging a weekly gap-down in April 2022, the Nifty index is trading with another weekly gap down. If this trend breaks the recent reversal mark of 15,671, then the index could slide to next support of 15,318, which is its 100-WMA. The formation would then reveal "Lower High, Lower low" set-up on the weekly chart, pointing to a bearish sentiment. For now, the resistance stands at 16,200.  CLICK HERE FOR THE CHART

NIFTYBANK

Outlook: Support at 100-WMA

Nifty Bank index trades near the support of 100-WMA, positioned at 33,138. As long as this support is held, the trend might regain confidence. As of date, the index has a resistance at 34,700 and the sentiment appears to be weak. CLICK HERE FOR THE CHART

NIFTY IT INDEX

Outlook: Bearish under 100-WMA

After breaking the "Head and Shoulder" neckline, the index fell under 100-WMA, placed at 28,350. But, it quickly regained the momentum and managed to close above the same average. Now, the index has again fallen under the same and if this time it fails to rebound, the weakness could regain the bearish sentiment. The following support comes at 27,000 level.  CLICK HERE FOR THE CHART