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Negative sentiment continued for the third straight session as the US Fed's hawkish stance has raised concerns about steeper rate hikes, while investors trimmed positions ahead of RBI policy, although most experts believe the MPC maintain the status quo on policy rates. The decline was primarily due to profit-taking in Reliance Industries and other energy stocks amid volatility in global crude oil prices. The market ended lower for the third straight session on April 7 ahead of tomorrow's RBI policy outcome. At the close the Sensex was down 575 points to 59034 and the Nifty down 168 points to 17639. The Bank Nifty Index pre-RBI policy remains subdued as HDFC Bank continues to exert heavy selling pressure. Technically, the Nifty is still holding the lower high formation on intraday charts and has also formed a bearish candle that is mostly negative. However, over the past three days the index has corrected by over 475 points and is currently trading near the key retracement support level after a short-term correction. The Nifty had recently tumbled near the upper Bollinger daily band and a falling trendline drawn from the October high. This was followed by a setback for the last three sessions. On the downside, it has filled in the recent gap range of 17791-17703 and is approaching the bottom of an inverse rising channel that lies near 17550. Selling pressure is expected to be absorbed near 17550-17500. The overall structure suggests that the index has re-entered a short-term consolidation phase and consolidation may take place in the next few sessions in the 17,500-18,000 range. Nifty has fallen out of the rising channel on the daily chart, indicating an easing bull market. The daily RSI is in a bearish crossover. The trend looks negative in the short term. On the lower end, support is seen at 17,450 while resistance is seen at 17,750-17,800. Technically, the Nifty Index had tested resistance at the upper Bollinger Band pattern and traded below it, suggesting weakness in the meter. In addition, the index also closed the weekly gap, moving below the previous week's close. A momentum indicator RSI has turned down from overbought territory. However, an indicator MACD is still showing a positive crossover on the daily scale. On a four-hour chart, the index has formed a bearish Marubozu candle, signaling bearishness for the coming day. Currently, the index has support at 17,430 levels while resistance is placed at 17,800 levels. On the other hand, Bank Nifty has support at 36,850 levels while resistance lies at 38,000 levels. The bank needs to close above the 38000 level to resume the uptrend. A clear direction will be visible once the policy is announced.
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