Break below 7700 on Nifty may open door for more weakness: CLSA

Moneycontrol BureauThe Nifty is wavering below the major overhead resistance in the 7,900-8,000 area provided by the 200-day moving average, writes CLSA’s technical analyst Laurence Balanco.“Key short-term support is seen at 7,661-7,700 provided by the 50- day moving average. A break below this level would open the door for further weakness down to the 7,400 area,” Balanco writes in his note to clients.Balanco is also cautious on US equities.“We have been anticipating a 2Q (second quarter) top to lead to a sell-off into 3Q (third quarter). The S&P500 futures have formed key support at last Friday’s low of 2,026-2,030,” says the note, adding that a break below this level would trigger the bearish implication. “As such, we maintain the view of using further strength to sell into and take a more defensive stance,” writes Balanco.