Nifty may breach 10K
The carnage on Dalal Street continued last week on the back of sustained selling pressure across all stocks. The FIIs continued to be net sellers in the cash segment but remained net buyers in the derivatives segment. The DIIs, however, continued to support the markets at the lower levels and remained net buyers. The breadth of the market remained weak amidst high volumes, which is a negative sign for the markets. On the global front, crude oil prices remained soft. However, the pressure to impose restrictions on oil from Iran is likely to push the prices higher once implemented. The US markets corrected due to earnings downgrades and a slowdown forecast. On the domestic front, the earnings season remained a mixed bag. NBFCs continued to face the heat. Technically, the prevailing negative technical conditions continued to weigh on the market sentiment. The MACD,
KST and RSI are all placed below their respective averages on the daily and weekly charts. Further, the
Nifty is placed below its 50-day SMA, 100-day SMA and 200-day SMA. These negative technical conditions could lead to further selling pressure, especially at the higher levels.
The prevailing positive technical conditions, however, still hold good. The Stochastic is placed above its average and is placed in the oversold territory on the daily and weekly charts. Further, the Nifty’s 50-day SMA is placed above its 100-day SMA and 200-day SMA and its 100-day SMA is placed above its 200-day SMA. These positive technical conditions could lead to shortcovering and selective buying support at the lower levels.
The -DI line is placed above the +DI line and the ADX line and above 34. But it has come off its recent highs, which indicates that the sellers are covering shorts regularly. The ADX line is placed above 40. The Nifty is on the verge of breaching the 10K mark.
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It is important for the Nifty to bounce back and cross 10200 for selling pressure to ease. If it slips below 10000, then the selling pressure could intensify and it could test 9800 very soon. On the upside, 10200 is likely to become a strong resistance level.
The market sentiment remains nervous and weak. Positive news flow and announcements are needed from the government on the liquidity scenario and the NBFC turmoil for the markets to come out of the current rut. 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 33723, 34344, 34937, 35322, 36350 and 37165 levels and seeks support at the 32972 and 32483 levels. The resistance levels for the Nifty are placed at 10200, 10283, 10340, 10419 and 10589 while its support levels are placed at 10000, 9958, 9827 and 9735.