Market still in a bear grip, Nifty may fall 2-5% more

The steep decline in the market yesterday has left it susceptible to a sharper fall. Leading technical analysts do not rule out a decline in the Nifty to 7700-7900-levels, which could be 2-5 per cent below yesterday's closing of 8,097. While analysts are hopeful that the indices could rebound from those levels, such a bounce-back would be short-lived.

Shubham Agarwal, Head - Technical Research, Motilal Oswal Securities

Where is the market headed?

Post a ‘Doji’ on Nifty at the peak of 9100, it saw another ‘Bearish engulfing pattern’ on the weekly chart around 8800. These formations clearly indicate that the down-trend is intact and pullbacks should be used as an opportunity to sell. A breakdown from an upward sloping channel adds to this breakdown and indicates bearishness. Our statistical model continues to recommend underperformance in Nifty compared to other Global Equity Markets.

What should investors do?

The downtrend can accelerate for an initial target of 7700 and pull back, if any, should be used as an opportunity to sell. The range of 8350-8400 is a strong resistance for near term.

Ashu Bagri, Assistant Vice President-Technical, SBICap Securities

Where is the market headed?

Since Nifty futures have closed below 8160, the next support is at 7905 (7905 is the 38.20% price extension which we have drawn from low of 2228 to a high of 6336). Only, a close above 8160 will take Nifty futures to higher levels of 8390.

What should investors do?

Buying at lower levels is advisable for investors with a three-month view as we see a pullback in the month of June and July can be top of the pullback rally. We are saying this because MACD has given a negative divergence in the month chart. Generally, there is a pull back after a negative divergence for the short term. On long-term basis, market has turn bearish. One can look to buy Sesa Sterlite for a short-term trade.

Sandeep Wagle, Founder & CEO, Power My Wealth

Where is the market headed?

The markets tanked on Wednesday with the Nifty closing lower by almost 230 points decisively breaking the very significant support level of 8270-8280. This clearly indicates that the immediate short term will see some more downside with 7960 being the next likely target. In case that level is not held on to, 7730 is the next likely target.

What should investors do?

At a close of 8097, a bounce-back of more than 50 to 70 points looks unlikely with 8180 being a very strong resistance. For traders, the broad range for the Nifty over the next few trading sessions is likely to be 7950 to 8150.