Indian equity benchmarks extended their previous session losses with a negative start on Wednesday, 12th May, mirroring weakness in the global markets.

In the afternoon session, Indian equity benchmarks continued to trade in the red zone and closed one percent lower below 14,750 levels.

The Nifty50 on the daily chart continues to trade in a downward sloping channel pattern and the width of the channel is almost a thousand points henceforth prices are trading within a band of 14,100 to 15,100 levels.

The index has broken out of the Rising channel pattern on the weekly chart and has most likely completed its pullback near its trend line resistance.

After trading within the rising channel pattern for more than 12 months, the index registered a decisive breakdown that suggests prices to continue to trade below their trend line resistance then there will a change in the trend from upward to negative.

India VIX is reading in a range between 16.50 – 24 levels and currently hovering around 20.08 levels. If VIX moves above 23, then it might test the upper band of the channel at 25 levels.

Indian bourses on the daily chart are trading above their 100-day exponential moving average which is placed above the lower band of the channel pattern acting as a crucial support zone for the index.

Momentum oscillator RSI (14) is reading near 50 levels on the daily chart and the MACD indicator also closed above its centerline with a positive crossover.

We expect Nifty to trade with a sideways to negative bias as prices have taken a stiff resistance near the upper band of the pattern.

Support for the Index is placed at 14450 levels while resistance rests near 14950 post-break of the level will open the gate for 15100 levels.