WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

In­dian stock markets broke out of a pro­longed breather af­ter In­dia over­came 30 other coun­tries to achieve 100 th po­si­tion in ease of do­ing busi­ness. Fur­ther, the Fed­eral Re­serve's de­ci­sion to keep the in­ter­est rates un­changed in the re­cent pol­icy re­view buoyed the US markets and thereby other bourses across the world. How­ever, markets went into standby mode yet again on ac­count of sub­dued auto sales num­bers, with Maruti Suzuki emerg­ing as the only or­gan­ised player post­ing high­est sin­gle digit growth. Markets ig­nored the core data, which grew by 5.2%, its high­est pace in the fi­nan­cial year. As it is, markets are likely to re­main volatile in the on­go­ing cor­po­rate earn­ings sea­son. The FIIs seemed to have re-en­tered In­dian eq­uity markets, while the DIIs main­tained their po­si­tions.

Broader markets out­per­formed the bench­mark in­dices by gain­ing more than 2% since last Thurs­day. Among the sec­tors, re­alty was yet again the win­ner with 7.7% gain. On Novem­ber 2, though pharma posted over 3% gains, PSU banks and FMCG re­frained the markets from gain­ing fur­ther with losses of 1% and more. Over­all, the mar­ket breadth re­mained weak with 746 ad­vances and 810 de­clines on the NSE.

Since the be­gin­ning of the week, Nifty in­dex traded in a nar­row band; how­ever, on Wed­nes­day, Nifty re­gained mo­men­tum af­ter the brief con­sol­i­da­tion and formed a size­able bull can­dle, which broke out of the nar­row trad­ing range sig­nalling re­sump­tion of up­ward mo­men­tum. On Thurs­day, Nifty reg­is­tered high of 10,453, and there­after, it con­sol­i­dated in a range for the en­tire trad­ing ses­sion, which re­sulted in the for­ma­tion of a small body bear can­dle. Now, go­ing for­ward, the bullish gap area formed on Wed­nes­day be­tween 10,36810,383 will act as an im­me­di­ate sup­port for the Nifty, whereas a de­ci­sive close be­low this gap area will re­sult in fur­ther cor­rec­tion up to lev­els of 10,300-10,320. On the other hand, the level of 10,482 could act as a re­sis­tance level as it is 161.80% re­trace­ment level of the down move. A de­ci­sive close above this level may well re­sult into fur­ther up­side to­ward the lev­els of 10,540-10,600.

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