WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

In­dian bench­mark in­dices wit­nessed a breather for the sec­ond straight week af­ter more than 3 per cent cor­rec­tion from all-time high lev­els. Eas­ing geopo­lit­i­cal ten­sions be­tween North Korea and the

US had brought some buoy­ancy, but doubts over Trump’s ad­min­is­tra­tive poli­cies and de­lay­ing tax re­forms washed off US eq­uity gains and dragged the dol­lar down. More­over, ris­ing con­cerns over

In­dia-China stand-off on Dok­lam is­sue too re­frained mar­kets from con­tin­u­ing with short cover­ing. How­ever, mar­kets were saved from plung­ing fur­ther ahead of strong macroe­co­nomic data ex­pected to be re­leased. The coun­try ex­pects GDP of 6.6 per cent in June quar­ter as com­pared to 6.1% in March. More­over, the coun­try also ex­pects op­ti­mistic man­u­fac­tur­ing and ser­vices PMI, in line with global bourses. All-in-all, the bench­mark in­dices Nifty and Sen­sex are trad­ing in con­sol­i­da­tion mode with lack of mo­men­tum.

Broader mar­kets re­mained a mixed bag con­sid­er­ing move­ment since last Thurs­day. The mid-caps slightly re­cov­ered with 0.15 per cent gains while small-caps marginally fell by 0.4 per cent. IT re­mained the lead drag­ger and plunged over 4 per cent, led by a sharp 10 per cent plus fall in In­fosys on the res­ig­na­tion of Vishal Sikka as the CEO. Power and auto sec­tors fol­lowed with 2.2 per cent and 1.1 per cent losses, re­spec­tively. On August 24, mar­kets at­tempted re­cov­ery, driven by a sharp up­side in pharma sec­tor stocks. Over­all, the mar­ket breadth re­mained pos­i­tive with 847 ad­vances and 648 de­clines.

Nifty has been con­sol­i­dat­ing on the weekly time frame keep­ing 9685 as the cru­cial sup­port level for now. Nifty at­tempted short cover­ing but re­sisted near to the 61.8 per cent re­trace­ment level of the down­ward move. On the daily time frame, Nifty has a strong up­ward slop­ing trend­line sup­port at 9760-9740. On the up­side, we hold 9885 as im­me­di­ate re­sis­tance, fol­lowed by 9950. Go­ing for­ward, we need Nifty to break 10075-10150 on the up­side to con­tinue with pos­i­tive trend. How­ever, on the down­side, Nifty may see a trend re­ver­sal if 9448-9445 is bro­ken. The mar­kets are likely to re­main range-bound in the near term in the wake of di­min­ish­ing vol­umes and 14-pe­riod RSI quot­ing at 49 level that sug­gests lack of mo­men­tum for now.

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