Below 10300 Nifty may take support at 10190-10090
Indian stock markets seemed bewildered with the tug-of-war between the bulls and bears at the peak levels. Earlier, the government’s decision to recapitalise PSU banks had ignited a spark in the PSU banking stocks. Thereafter, the momentous leap by the country from the 130th to the 100th rank in 'Ease of doing business' resulted in yet another jump in the markets to new highs. The news also helped the country to regain confidence of the FIIS, who appreciated India's feat with some fresh buying last week. However, subdued auto sales numbers and mixed corporate earnings on the one hand, and robust global cues on the other hand, led to intra-day volatility on a daily basis during last week. However, at the broader level, markets are on a selling spree with profit-booking coming in at peak levels.
Going forward, the second-half of the financial year would be watched keenly, with expected growth in the earnings after the crecovery almost done in the June-september results. The corporates could have improved their earnings in FY17 itself, but were refrained by demonetisation and hustle over GST. Still, the second-half looks brighter as macroeconomic numbers too are favouring growth, which could provoke RBI to cut interest rates in the next couple of policy reviews. Even the government has kicked-off execution of plans, which is expected to bring in more business and generate more employment in the country in the years to come.
Coming back to the current scenario, the benchmark index Nifty is just off its all-time high level, where the correction is duly supported by rising volumes and the 14-period RSI negative crossover in the over-bought zone. The start of November 2017 was exuberant for the Nifty, which has recently witnessed weakness with indecisive moves on intraday basis. Nifty is still in the consolidation mode, which it attempted to break out on the upside on November 6, but retreated back as if a shooting star pattern is in the making. In case Nifty continues to correct, we hold 10,300 as the immediate support, followed by 10,240. However, in case Nifty witnesses a consolidation breakout, we hold 10,500-10,550 as immediate resistances. On a weekly basis, it is the third consecutive upward tick for the Nifty, and hence, it may have some more room to move up. Hence, for the long term, we hold 11,670-10,700 as the medium-term targets. However, market participants look hesitant to enter at the current levels. Hence, below 10,300, the levels of 10,190-10,090 look good supports to enter again