Update: It’s a terrific Tuesday for the Indian benchmark indices as both Nifty and Sensex are up by nearly half a per cent during the early trade despite the fact that IT bellwether TCS is down by over 3.5 per cent. The advance-decline ratio is strongly in the favour of advancers. Amongst the sectoral indices, barring Nifty IT and Nifty Pharma, all were trading in green with Nifty Realty and Nifty PSU Bank being the top gainers as they have gained over 2 per cent each. Talking about the stock-specific action, profit booking is seen in Dr Reddy’s Laboratories after it announced that it has got emergency use authorisation for Sputnik V in India. On the other hand, stocks like Subex, Panacea Biotech and Gujarat Alkalies & Chemicals have logged a fresh 52-week high. After forming a ‘calm before the storm’ pattern in the last trading session, Nifty opened with a huge gap down and continued to plunge southwards amid the rising COVID-19 cases, vaccine shortage issue and probability of lockdown in various parts of the country. Post the gap down opening, there were no major pullbacks witnessed during the intraday trade and at one point of time, the index breached its recent corrective swing low of 12,264 levels and went on to test its 100-DMA. However, in the last hour of the trade, a slight rebound from the lower levels was witnessed but despite the rebound, Nifty recorded its worst single day fall since March 03. Monday was a classic trend day as Nifty opened at one extreme and closed on the other. Besides, throughout this time period, the volatility increased, which is another important characteristic of the trend day. According to Japanese candlestick formation, this was a ‘Black Opening Marubozu’. The range of the day for Nifty was almost 404 points, which was almost twice the 10-day average. And, in the past, whenever such an incident took place, the index has either formed an inside bar or an indecisive bar. Nifty has now ended around March 25 swing low and a sustainable move below Monday’s low could extend the weakness towards the levels of 14,000. Interestingly, there is a bearish crossover seen as 20-DMA has undercut the 50-DMA and moreover, both the moving averages are trending downwards. Monday’s session qualified as a distribution day and with this, the distribution day count increased to seven. Nifty breached its 50-DMA decisively and on the back of higher volumes, the status of the market has been changed to a downtrend. Overall, after Monday’s massive plunge, the bias has shifted in the favour of bears and for trader’s best strategy to adopt is ‘sell on the rise’ instead of ‘buy on dips'. On the upside, the zone of 14,450-14,480 is likely to act as a stiff resistance. The 14-period RSI on the daily chart shows a mild bullish divergence against price. While the -DI is above the ADX and +DI & -DI is in a rising trajectory but ADX is not reflecting strength as it's not above the 25 mark. Tuesday’s price action is important to watch out for because a follow-through selling would result in the final nail in the coffin for the bulls.