WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

An abrupt in­cli­na­tion of in­vestors to­wards com­modi­ties, specif­i­cally the crude oil, dragged In­dian eq­ui­ties south­wards. Anti-cor­rup­tion drive in Saudi Ara­bia led to a pro­vi­sional but rise in oil prices to record lev­els. Fur­ther, in­vestors re­mained wary of the China trade data, which later turned out to be pos­i­tive for the mar­kets across the world. Mixed cor­po­rate earn­ings re­ports too con­fused the mar­ket sen­ti­ments, which fi­nally led to a sharp correction in the In­dian eq­ui­ties af­ter con­sol­i­dat­ing for three con­sec­u­tive days. All-in-all it was prof­it­book­ing by in­vestors who had en­tered smartly post the de­mon­eti­sa­tion down­fall and had bought scrips at big dis­counts.

Dur­ing the week since last Thurs­day, bar­ring IT that played a de­fen­sive role by surg­ing 3.5 per cent, all other sec­tors ended in the red. Re­alty, power and metal bled the most, with losses of 2 per cent and more. Broader in­dices, viz Mid-cap and Small-cap too tum­bled and fell 0.9 per cent 0.8 per cent, re­spec­tively, weak­en­ing the over­all mar­ket breadth dur­ing the pe­riod.

Nifty50 in­dex, af­ter scal­ing to an all-time high lev­els of 10,490.45 as on November 6, 2017, formed a siz­able bear can­dle on November 7, 2017, which over­shad­owed pre­vi­ous three days' can­dles. On Wed­nes­day, fol­low-through sell­ing was seen and the in­dex snapped its se­quence of higher highs/higher lows of the last five weeks as it closed be­low the pre­vi­ous week’s low of 10,323. On Thurs­day, de­spite open­ing with a gap-up, Nifty failed to hold on to its gains and slipped lower and in the mid-af­ter­noon ses­sion, Nifty slipped be­low the 10,300-mark on an in­tra-day ba­sis. How­ever, it took sup­port near to its 21-day EMA and re­couped some of the losses to end above 10,300-mark. In the com­ing trad­ing ses­sions, the lev­els of 10,380-10,400 are likely to act as a stiff re­sis­tance lev­els for the Nifty. On the other hand, ma­jor sup­ports for Nifty are seen at lev­els of 10,240-10,260, and a fol­low-through move be­low these lev­els could open fur­ther gates for correction up to the lev­els of 10,200 and 10,140. Fail­ure to do so will re­sult in a con­sol­i­da­tion in the range of 10,260-10,400.

LEG­END : EMA – Ex­po­nen­tial Mov­ing Av­er­age.

MACD – Mov­ing Av­er­age Con­ver­gence Di­ver­gence

RSI – Rel­a­tive Strength In­dex

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