Global equity markets have been correcting significantly for the last few days. The Nifty too has been inching closer to the 200-day moving average of 11,684.

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Technical expert Laurence Balanco of CLSA said, “If you are looking for a confirmed breakdown on S&P below 3,000 area, it would be a major concern for the rest of the global markets and that would suggest Nifty back below 200-DMA.”

With regards to the Nifty, he said, the 200 day moving average (DMA) is a key support area and they believe it would be defended. “This consolidation that we saw through 2019 sets a platform for the resumption of the longer term trend that we have seen for Nifty and we still get an upside target at 13,800 area," he added.

So, if 200 day moving average is broken then Nifty could go to 10,580 but their base is that Nifty would still hit 13800, he said.

According to him, Nifty Bank needs to hold its 200-DMA or else it can slide to 27,000.

When asked about commodities, Balanco said, “Gold dislocated with its normal negative correlation with dollar, it did get to our short-term upside target of USD 1,670/oz where we have seen some hesitation and over the longer term USD 1,800/oz is the upside target.”

“Brent on the other hand has spent the past 18 months consolidating at the bottom end of the range is USD 52-55/bbl and that is where it found support and top of the range is USD 72.50/bbl. So we are looking at the bottom-end of this range to hold,” added Balanco.