Sell on rise below Nifty 10400
As indicated in the last issue, the Nifty tested the 10270 level last week. It closed below 10350 last week and will gain strength only above 10400. Below 10300, it could test the 10250-10200 levels. The Nifty made a weekly low last week and its weekly close is below the week before last’s low of 10324. Stocks belonging to the auto, pharma, private banks and oil companies (BPCL and Reliance Industries) slipped last week and have started showing weakness. Global markets are also tired and some positive news is needed to trigger the market. Any bad news could unleash selling in the market. Crude oil prices are on the rise and therefore, petrol and diesel prices will rise boosting inflation. Hence, the RBI may not cut interest rates further. The US Federal meet indicated a rate hike in December. On the domestic front, Gujarat elections will be held in December. The outcome of this election will have a huge impact on the markets for the short-term and we may see a 1,000+ point swing in the Nifty in December.
Colgate-Palmolive (India) looks good above Rs.1035 for upward levels of Rs.1050-1070 (SL: Rs.1020) Hindalco Industries is a Sell below Rs.268 for downward levels of Rs.260-250 (SL: Rs.273) Reliance Industries is a Sell below Rs.890 for downward levels of Rs.870-860 (SL: Rs.902) Yes Bank is a Sell below Rs.304 for downward levels of Rs.300-297-295 (SL: Rs.309)