The market is expected maintain its bearish trend as unfavourable developments on the global stage continue to impact sentiment. Technical analysts have identified 19,500 as the immediate support for the Nifty, with a subsequent swing low support at 19,330.
They caution if this support is breached, there is a likelihood that the index could further decline towards the range of 19,000 to 18,900 in the coming weeks. Analysts suggest traders may want to explore potential opportunities in Reliance, HDFC Bank, IndusInd Bank, and Sun Pharma.
RUCHIT JAIN
LEAD RESEARCH ANALYST, 5PAISA.COM
Where is Nifty headed this week?
The recent pullback in Nifty resisted around the 61.8% retracement of the previous correction. FIIs have been selling in the cash segment and have 75% positions in index futures on the short side. The RSI oscillators in Nifty and Bank Nifty have negative crossovers on daily charts, indicating a weakening momentum. Thus, the data is bearish, and since global news flows are also negative, our markets could continue with its corrective phase in the near term. In the coming week, 19,480 will be seen as the immediate support, followed by swing low support at 19,330. This month’s low at 19,330 will be a crucial level, which, if broken, we could see an extension of this correction towards 19,000- 18,900 in the next few weeks.
What should investors do?
Traders are advised to stay cautious until the index surpasses the hurdle of 19,800-19,850 or the data hints at optimism. Stocks such as SBI, Bandhan Bank, and Divi’s Lab have bearish setups. Selective stocks like IndusInd Bank and Sun Pharma (breakout above `1,170) can show outperformance. One should watch the Nifty Midcap100 index closely, as a breakdown below 39,500 can lead to a broader market correction.
MEHUL KOTHARI
AVP – TECHNICAL RESEARCH, ANAND RATHI SHARES & STOCK BROKERS
Where is Nifty headed?
Despite the weakness, Nifty is still above the Dragon Fly Doji, which occurred a few weeks back. At the same time, Nifty is hovering near the support of a rising trend line near the 19,500 mark. Thus, 19,500 might be an important support for the coming week on a closing basis. A convincing move below the same might bring the swing low of 19,333, which is also the low of Doji under threat. This can be a fresh trigger for further panic. On the other hand, above 19,700, we expect the bulls to turn a bit aggressive, and this can lead to a fresh rally towards the 20,000 mark. The coming week will be quite interesting since the index is at a crucial support while the FIIs’ long-short ratio in the index future is approaching the oversold zone of 20%.
What should investors do?
On the stock front, there are few names, which indicate a possibility of going against the ongoing selling. Thus, staying on the sidelines until Monday’s first half is better. In addition, traders are strictly advised to hedge their long positions since any escalation in the ongoing geopolitical crisis might reverse the markets without any intimation.
APURVA SHETH
HEAD OF MARKET PERSPECTIVES, SAMCO SECURITIES
Where is Nifty headed?
Nifty slipped lower after touching the gap resistance of 19,850. It is currently placed just above the crucial support level of 19,500. Maximum put open interest is also placed around 19,500. If the index holds above it, we can see some upside in the truncated week. Otherwise, a break below 19,500 could take the index down to 19,300 levels. We recommend avoiding trading in Nifty since the movement is prone to gapup or -down moves, and the chances of stopping losses.
What should investors do?
Geopolitical risks and rising US bond yields are major worries for global financial markets. We recommend investors limit their exposure to equities and increase exposure to gold and long-term debt as we are close to peak interest rates. The allocation to gold and debt should gradually increase as we move closer to the Lok Sabha Elections next year. Traders can look for extended opportunities in Reliance and HDFC Bank as both are trading close to their long-term supports. L&T looks weak and can be traded on the short side.
