Nifty upsides capped in sell-on-rise market

Price action shows Nifty 50 may remain under pressure until stability is found near key support levels

- PUNEET WADHWA & REX CANO

The relentless selling by foreign institutional investors (FIIs) across large, mid, and smallcaps has led to an over 10 percent fall in the frontline benchmark indices of these three market segments from their peak levels hit earlier this year.

If technical charts are to be believed, there is more pain ahead for the markets as intermittent rallies/bounces are likely to get sold into for a downside target.

According to Chandan Taparia, head of equity derivatives and technical, wealth management at Motilal Oswal Financial Services (MOFSL), the Nifty 50 index breached its key support level at 23,333 earlier this week, signaling the possibility of further downside towards the 23,000 mark.

As persistent selling at higher levels continues, Taparia noted that a 'sell-on-bounce' trend is firmly in place at least for now.