The stock market snapped a seven-day losing streak on February 25, the first day of the March series, with a 2.5 percent gain. The benchmark indices as well as the broader market weakened after Russian forces invaded Ukraine, which lifted oil prices to over $100 a barrel and took other commodity prices to either record high levels or multi-month highs. Net sales by foreign institutional investors were Rs 19,843 crore during the week.
The Nifty 50 fell to about 16,200 during the week before bouncing back to close at 16,658, down 3.6 percent and still below the 200-day simple moving average (SMA 16,903), 50-day SMA (17,412) and 100-day SMA (17,577), the real technical cause of concern. The index must surpass 16,800-17,000 levels to gain strength, which is possible if geopolitical tensions ease. However, 16,400-16,200 will act as crucial support levels, experts said.
“We can clearly see Nifty breaking below the sacrosanct moving average of 200-SMA placed around 16,900. Since this has happened with a ‘breakaway gap,’ traders would continue to have challenging times till we reclaim 16,800-17,000 with some authority,” said Sameet Chavan, chief analyst-technical and derivatives, at Angel One.
He said reaching 16,800-17,000 levels is possible in the near term only if tensions ease with respect to Russia and Ukraine and until that happens, “we are not completely out of the woods.”