WHAT LIES AHEAD : NEAR-TERM PICTURE
SPOT NIFTY : Indian stock market bears continue to hold the controls of the markets with a series of negative domestic and global events supporting the southward move. Markets also remain cautious ahead of rate hikes by both Fed and RBI before the year end, The Q2FY19 earnings data would most likely disappoint amid rising crude oil prices and rupee falling to its record low levels and, mostly importantly, markets taking a political view with the state elections at the doorstep.
The benchmark indices shed more than 3% from the corresponding day of the last week. The Mid-cap and Small-cap indices too tumbled but at a slower pace, losing 3% and 2.3%, respectively. On the sectoral front, Metal index led the downside move and slipped 7.4% and Realty followed with 5.7% loss. The only sector that stayed flat was the Bankex. Technically, our benchmark index Nifty had formed a reversal Doji on October 8, which turned into a whipsaw on October 11, where Nifty fell below 10198 at 10138 level. Hence, if we consider the current move to have initiated another downside rally post three days' breather, we hold 10100-10000 as the crucial support zone, followed by 9950, which is a trend reversal level. The levels of 9780-9680 will be the medium term supports.
However, Nifty has managed to close above 10200 on a closing basis, and hence, if it lifts itself up for short-covering in the first place, we hold 10375, followed by 10520, as the resistances.