Be­low 10300 Nifty may take sup­port at 10190-10090

Dalal Street Investment Journal - - CONTENTS -

In­dian stock mar­kets seemed be­wil­dered with the tug-of-war be­tween the bulls and bears at the peak lev­els. Ear­lier, the gov­ern­ment’s de­ci­sion to re­cap­i­talise PSU banks had ig­nited a spark in the PSU bank­ing stocks. There­after, the mo­men­tous leap by the coun­try from the 130th to the 100th rank in 'Ease of do­ing busi­ness' re­sulted in yet an­other jump in the mar­kets to new highs. The news also helped the coun­try to re­gain con­fi­dence of the FIIS, who ap­pre­ci­ated In­dia's feat with some fresh buy­ing last week. How­ever, sub­dued auto sales num­bers and mixed cor­po­rate earn­ings on the one hand, and ro­bust global cues on the other hand, led to in­tra-day volatil­ity on a daily ba­sis dur­ing last week. How­ever, at the broader level, mar­kets are on a sell­ing spree with profit-book­ing com­ing in at peak lev­els.

Go­ing for­ward, the sec­ond-half of the fi­nan­cial year would be watched keenly, with ex­pected growth in the earn­ings af­ter the cre­cov­ery al­most done in the June-septem­ber re­sults. The cor­po­rates could have im­proved their earn­ings in FY17 it­self, but were re­frained by de­mon­eti­sa­tion and hus­tle over GST. Still, the sec­ond-half looks brighter as macroe­co­nomic num­bers too are favour­ing growth, which could pro­voke RBI to cut in­ter­est rates in the next cou­ple of pol­icy re­views. Even the gov­ern­ment has kicked-off ex­e­cu­tion of plans, which is ex­pected to bring in more busi­ness and gen­er­ate more em­ploy­ment in the coun­try in the years to come.

Com­ing back to the cur­rent sce­nario, the bench­mark in­dex Nifty is just off its all-time high level, where the cor­rec­tion is duly sup­ported by ris­ing vol­umes and the 14-pe­riod RSI neg­a­tive cross­over in the over-bought zone. The start of Novem­ber 2017 was ex­u­ber­ant for the Nifty, which has re­cently wit­nessed weak­ness with in­de­ci­sive moves on in­tra­day ba­sis. Nifty is still in the con­sol­i­da­tion mode, which it at­tempted to break out on the up­side on Novem­ber 6, but re­treated back as if a shoot­ing star pat­tern is in the mak­ing. In case Nifty con­tin­ues to cor­rect, we hold 10,300 as the im­me­di­ate sup­port, fol­lowed by 10,240. How­ever, in case Nifty wit­nesses a con­sol­i­da­tion break­out, we hold 10,500-10,550 as im­me­di­ate re­sis­tances. On a weekly ba­sis, it is the third con­sec­u­tive up­ward tick for the Nifty, and hence, it may have some more room to move up. Hence, for the long term, we hold 11,670-10,700 as the medium-term tar­gets. How­ever, mar­ket par­tic­i­pants look hes­i­tant to en­ter at the cur­rent lev­els. Hence, be­low 10,300, the lev­els of 10,190-10,090 look good sup­ports to en­ter again

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