Sensex cracks 2,500 pts in 4 days, Nifty below 50-wk average; what next?

A weekly close below the 50-WMA, shall open the doors for a likely slide towards 22,275 on the Nifty. Sensex likely to test 75,200 in the near-term.

The BSE (Bombay Stock Exchange) benchmark index has plunged 3 per cent or nearly 2,500 points in the last four trading sessions. Whereas, it’s counter-part, the NSE (National Stock Exchange) Nifty 50 index has shed 2.8 per cent or 679 points to a low of 23,496.  Among the Nifty 50 shares, ITC was the major loser, mostly on account of price-adjusted for demerger of its hotel business. Among others, Trent, BPCL, HDFC Bank, Adani Ports, Kotak Mahindra, Bank, TCS and Tata Steel bore the brunt of the selling. ONGC, SBI Life, Tata Motors and Titan were the stark outperformers in the last four days.  On Wednesday, the Sensex had tumbled to a low of 77,487, and was seen quoting with a loss of 0.8 per cent at 77,600 levels in noon deals. The Nifty 50 index traded around 23,535 levels - down 0. 8 per cent.  On the charts, the Nifty 50 index is yet again seen testing its all-important 50-WMA (Weekly Moving Average) support, which now stands at 23,661. The Nifty has been hovering around this key moving average since late November 2024. However, till date the index has managed to sustain above it on a weekly closing basis. The Nifty last closed below the 50-WMA in April 2023.    Will Nifty bounce back yet again to close above this key moving average by Friday or will the index finally break it this time around? Here's what to expect.  Nifty  Current Level: 23,535  Upside Potential: 4.1%  Downside Risk: 5.4%  Support: 23,661; 23,085; 22,520  Resistance: 23,923; 24,090; 24,400  Apart from testing the 50-WMA support, the Nifty has been hovering around its 200-day SMA (Daily Simple Moving Average) since November. The 200-DSMA stands at 23,923, and is likely to act as a key hurdle for the index in the near-term. CLICK HERE FOR THE CHART  For now, it seems like the Nifty is on course to test support at its 20-MMA (Monthly Moving Average) which stands at 22,275. Intermediate support for the NSE benchmark can be expected around 23,085 and 22,520 levels. On the other hand, in case, the Nifty is able to take out the 200-DSMA resistance, the index can potentially attempt a pullback to 24,500 levels; with interim resistance seen at 24,090 and 24,400 levels.    Sensex  Current Level: 77,600  Upside Potential: 2.9%  Downside Risk: 3.1%  Support: 77,000; 76,300; 75,760  Resistance: 77,865; 78,190; 78,585  Today, the BSE Sensex seems to have given a sell signal on the weekly Fibonacci scale. Thus going ahead, the bias for the rest of the week is likely to remain tepid as long as the Sensex remains below 78,585 levels; with near resistance expected around 77,865 and 78,190 levels.  On the downside, the BSE index can slide to 75,200 levels in the month of January, with intermediate support expected around 77,000, 76,300 and 75,760 levels. Break and trade above 78,585 can trigger a rally towards 79,900.