WHAT LIES AHEAD : NEAR-TERM PIC­TURE

Flash News Investment - - TECHNICALS -

The strong global cues and do­mes­tic macros held the mar­kets from plung­ing head­long. How­ever, bench­mark in­dices re­mained in­de­ci­sive with tremen­dous in­tra-day volatil­ity amid im­pul­sive stock-spe­cific earn­ings or news-based moves. ITC dropped and dragged down Nifty by 5% on Tues­day on news of im­po­si­tion of ad­di­tional com­pen­sa­tion cess, but it re­cov­ered in the next ses­sion, even as Aurobindo

Pharma spurted post USFDA ap­proval for its solid for­mu­la­tion. There­fore, we see Nifty be­ing driven by in­di­vid­ual front­line stocks in days to come.

Dur­ing the week, Nifty hit near 23.6% re­trace­ment level of the prior weekly up­ward rally and bounced back to trade near its all-time high levels, though it could not break the levels of 9928-9930, which we had talked of in the pre­vi­ous in­dex up­date.

On the sec­toral front, the daily losses were ma­jorly led by PSU banks, fol­lowed by pharma, me­tal and IT. On the weekly front, FMCG dragged the mar­kets with 6.7 per cent loss since July 13. On the other hand, realty, me­tal and banks saved the mar­kets from cor­rect­ing fur­ther and gained 1.4 per cent plus each. Broader mar­kets re­mained sub­dued dur­ing the week along with the bench­marks.

Nifty is un­able to break the level of 9930 on the up­side, and hence this level will act as a strong re­sis­tance level go­ing for­ward. Fur­ther, we main­tain 9950-9990 as the next re­sis­tances above 9930. On the weekly time frame, Nifty needs to sus­tain above 98869913 levels to con­tinue the weekly up­ward rally. On the down­side, 9870 is the ma­jor trig­ger level, be­low which Nifty can test 98559840 on an im­me­di­ate ba­sis. 9790 will act as a ma­jor sup­port level. Nifty is off its over­bought zone, but with a neg­a­tive crossover on the RSI, which is quot­ing at 65. How­ever, we main­tain pos­i­tive out­look un­less the 9700-mark is breached on the down­side. On the up­side, Nifty would test the 10000-mark if it breaches 9,930.

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