Nifty index has a strong support near 10500 levels and any rallies towards 10,900-11,000 should be used to lighten positions.
Nifty witnessed a bloodbath as it plunged over 250 points and BSE Sensex witnessed a fall of over 800 points. After a 29 percent rally in the year 2017, the Nifty recorded its worst fall of the year 2018.
Bears took control of the markets from the opening tick but selling pressure increased towards the closing of trade which pushed the index below 10,900, which was its crucial support level.
The index formed a Long Black Day on the charts after a High Wave pattern recorded on the Budget Day which suggests that the trend might be drifting towards the downside or could lead to further consolidation.
The index broke below crucial resistance levels of 11,000, followed by 10,900 and 10,800. It also closed below its crucial short-term moving averages of 5-days exponential moving average (DEMA), 13-DEMA, and 10-DEMA, and 20-DEMA.