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The Nifty IT index (11,043) has been in a consolidation phase all through 2015, within the overall long-term uptrend that has been in place since 2009. There is a crucial support at 10,800 above which the index has been hovering for about four weeks now.
This support will decide whether the overall uptrend will resume from the current levels or if this consolidation phase will turn into a corrective fall in 2016. A strong break and a decisive close weekly below 10,800 will be the first sign of a corrective fall.
In the charts, there is a high possibility for the index to fall below 10,800, as long as it trades below 11,500. Such a fall can take the index lower to 10,000 initially. Further break below 10,000 will see the Nifty IT index plummeting to 9,000 levels. This level is a strong long-term support for the index, around which both a trend line as well as the 200-week moving average is poised. This support is likely to hold if the index falls below 10,000.
On the other hand, the long-term uptrend will resume only after the index breaches 12,000 decisively. This break will pave way for the index to move to new highs of 13,500 and 14,000 over the long term.
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