Panic con­tin­ues

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

The panic con­tin­ued on the bourses last week. Fresh neg­a­tive news on hous­ing fi­nance com­pa­nies and con­tin­u­ing stress on IL&FS and Yes Bank con­tin­ued to im­pact the mar­ket sen­ti­ment.

The FIIs re­mained net sell­ers in the cash seg­ment but were mar­ginal net buy­ers in the de­riv­a­tives seg­ment. How­ever, the DIIs con­tin­ued to sup­port the mar­kets at the lower lev­els by re­main­ing net buy­ers but they, too, were oc­ca­sional sell­ers. The breadth of the mar­ket re­mained neg­a­tive amidst low vol­umes.

On the global front, USA and China im­posed fresh tar­iffs on each other. On the do­mes­tic front, the gov­ern­ment planned to im­pose disas­ter cess on lux­ury goods, cig­a­rettes and a few other items. In­vestors will closely watch the forth­com­ing RBI pol­icy. The Street ex­pects a 25-50 bps rate hike and a re­duc­tion in cash re­serve ra­tio (CRR). Tech­ni­cally, the pre­vail­ing neg­a­tive tech­ni­cal con­di­tions weighed on the mar­ket sen­ti­ment. The Sto­chas­tic, MACD,

KST and RSI are all placed be­low their re­spec­tive av­er­ages on the daily and weekly charts. The Nifty has slipped be­low its 50-day SMA and 100-day SMA. These neg­a­tive tech­ni­cal con­di­tions could lead to in­ter­me­di­ate bouts of sell­ing pres­sure es­pe­cially at the higher lev­els.

The pre­vail­ing pos­i­tive tech­ni­cal con­di­tions, how­ever, still hold good. The Nifty is placed above its 200-day SMA, which is its long-term av­er­age. 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 in­di­cat­ing a ‘golden cross’ break­out. These pos­i­tive tech­ni­cal con­di­tions could lead to buy­ing sup­port at the lower lev­els.

The -DI line is placed above the +DI line and is placed above 35. But it has come off its re­cent highs, which in­di­cates that the sell­ers are cov­er­ing their shorts at the lower lev­els. The ADX line is placed above 27. The Nifty has closed be­low 11000, which is a neg­a­tive sign for the mar­kets. It is im­por­tant that the Nifty moves and sus­tains above 11000 for sell­ing pres­sure to ease. If it fails to do so, then a fur­ther downslide is likely and it could test its 200-

Now fol­low us on In­sta­gram, Face­book & Twit­ter at mon­ey­times_1991 on a daily ba­sis to get a view of the stock mar­ket and the hap­pen­ings which many may not be aware of.

day SMA placed at 10770.

The mar­ket sen­ti­ment re­mains ner­vous. Any pos­i­tive ac­tion by the gov­ern­ment on the IL&FS mat­ter could im­prove the mar­ket sen­ti­ment. Mean­while, the mar­kets will take cues from the forth­com­ing RBI pol­icy, global mar­kets, Dol­lar-Ru­pee ex­change rate and crude oil prices. Tech­ni­cally, the Sen­sex faces re­sis­tance at the 36350, 37165, 37630, 38250, 38761 and 38989 lev­els and seeks sup­port at the 35322, 34937, 34344 and 32596 lev­els. The re­sis­tance lev­els for the Nifty are placed at 111342, 11431, 11515, 11537, 11603 and 11761 while its sup­port lev­els are placed at 11000, 10936, 10808, 10748, 10589 and 10419.

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