Nifty supports and resistances

Indian stock markets witnessed a gap down opening, where Nifty opened 241 points down; while Sensex shed 635 points in the first tick. Currently the benchmark indices are 3 per cent down.

Indian markets tumbled below their May 26 prices ahead of most likely Brexit wherein "leave" edged higher in UK referendum.

Technically speaking Nifty gave a dramatic surge of 0.8 per cent in the previous session hitting almost near the previous high as if to make a double top pattern. As a result there was an obvious downfall in the Nifty.

Our Inverse Head & Shoulders breakout was at 7910-7940 with rising volumes, which may act as the strong resistance turned support for the Nifty. Hence, Nifty most likely shouldn’t be falling below these levels at least in the intraday trade.

Moreover, after breaking 38.2 per cent and 50 per cent retracement levels at 8073 and 8005, we hold 7940-7935 as the 61.8 per cent retracement of the prior upside move. Hence if we see any recovery above the said levels we hold 8050-8065 as the immediate resistance followed by 8110-8150 for now. Going forward 8200 followed by 8300 are near term upside targets.

In case we see any fall below 7935, we hold 7870-7860 which are the 100 days and 200 days EMA support levels, followed by 7760 the gap filling level as the downside target for the Nifty.