Nifty may breach 10K

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

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.

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