Street ner­vous on NBFC tur­moil

Money Times - - Front Page - By San­jay R. Bha­tia

The mar­kets re­mained volatile last week mov­ing in both di­rec­tions. Global as well as do­mes­tic cues con­tin­ued to in­flu­ence mar­ket sen­ti­ment. Pos­i­tive global cues like fall in crude oil prices and pos­i­tive Q2 re­sults helped the Nifty move above the 10500 mark. But profit-book­ing and lack of fol­low-up buy­ing sup­port at the higher lev­els erased all gains.

The FIIs con­tin­ued to be net sell­ers in the cash seg­ment but re­mained net buy­ers in the de­riv­a­tives seg­ment. Tthe DIIs con­tin­ued to sup­port the mar­kets at lower lev­els and re­mained net buy­ers. The breadth of the mar­ket re­mained neu­tral amidst low vol­umes. On the global front, crude oil prices moved lower with Brent trad­ing be­low $80/bar­rel. On the do­mes­tic front, the earn­ings sea­son re­mained a mixed bag. Tech­ni­cally, the pre­vail­ing neg­a­tive tech­ni­cal con­di­tions weighed on the mar­ket sen­ti­ment. The MACD, KST and

RSI are all placed be­low their re­spec­tive av­er­ages on the daily and weekly charts. Fur­ther, the Stochas­tic is placed be­low its av­er­age on the daily chart. The Nifty is still placed be­low its 50-day SMA, 100-day SMA and 200-day

SMA. These neg­a­tive tech­ni­cal con­di­tions could lead to in­ter­me­di­ate bouts of profit-book­ing and sell­ing pres­sure, es­pe­cially at the higher lev­els.

The pre­vail­ing pos­i­tive tech­ni­cal con­di­tions, how­ever, still hold good. The Stochas­tic is placed above its av­er­age and has moved in the over­sold ter­ri­tory on the weekly chart. Fur­ther, the Nifty’s 50-day SMA is placed above its 100-day SMA and 200-day SMA and its 100day SMA is placed above its 200-day SMA, in­di­cat­ing a ‘golden cross’ break­out. These pos­i­tive tech­ni­cal con­di­tions could lead to short-cov­er­ing and fol­low-up buy­ing sup­port.

The -DI line is placed above the +DI line and the ADX line and above 35. But it has come off its re­cent highs, which in­di­cates that the sell­ers are cov­er­ing shorts. The ADX line is placed above 43. The Nifty has failed to sus­tain above 10400, which does not au­gur well for the mar­kets.

It is im­por­tant for the Nifty to re­spect the 10200 level.

Now fol­low us on In­sta­gram, Face­book & Twit­ter at mon­ey­times_1991 on a daily ba­sis to get a view of the stock mar­ket and the hap­pen­ings which many may not be aware of.

If the Nifty slips be­low 10200, the sell­ing pres­sure could in­ten­sify and it could test 10000. On the up­side, 10400 re­mains a strong re­sis­tance level. The mar­ket sen­ti­ment re­mains ner­vous and weak. Reg­u­lar buy­ing sup­port along with pos­i­tive news flow is needed for the mar­kets to come out of the cur­rent tur­moil. Mean­while, the mar­kets will take cues from the earn­ings sea­son, Dol­larRu­pee ex­change rate, global mar­kets and crude oil prices. Tech­ni­cally, the Sensex faces re­sis­tance at the 34344, 34937, 35322, 36350, 37165, 37630, 38250, 38761 and 38989 lev­els and seeks sup­port at the 33723, 32972 and 32483 lev­els. The re­sis­tance lev­els for the Nifty are placed at 10283, 10340, 10419 and 10589 while its sup­port lev­els are placed at 10200, 10000, 9958, 9827 and 9735.

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