Today's close to be crucial for mkts

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The penultimate day before Diwali but the mood cannot be very festive. The global markets are selling off and we are at an extremely critical juncture for our markets. Last few days have been so volatile the market has virtually had to run to standstill and now we get some volatile cues from the US markets and from the Asian markets .

 

 Will we break importance support levels or will today at the end of it standout as a day of resilience were we started weak but ended reasonably strong. Today is a test for the markets for sure; there is no other way to look at it.  

 

Bad global cues:

 

It comes in a bad time because we have been so volatile and directionless that we have also been searching for triggers to lend the next direction to the market up or down and at this critical juncture poised close to support levels you get a bad cue from the global markets. I think the bears will latch on to this cue with both hands and the bulls will feel quite miffed that the turn of the global events is gone against them.

 

I think today is an important day because today's closing will be quite important. If the bulls managed to hold out today and come back in the second half of the day then I think people will generally get the sense that we are shrugging off negative cues and that 19,000 kind of level broadly is holding as a support.

 

We have seen many times in the past bad news has happened around important support levels and those levels have not broken. I'm not saying that we are at one of those times now but I think today there will be a lot of defense around that 19,000 mark for the bulls and the bears will try to break it down to tip the market in the corrective way.

 

Today is important not so much of starting, which is the fate a comply. We will start weak but the closing today I think is more so because we are going into Diwali sentimentally and technically etc and I think today's closing will be quite crucial. 

 

Asian Indices:

 

It is not a pretty picture across Asia, the US pain is showing, Hang Seng is down 3%, Shanghai is down 2.5%, Nikkei is down 2.25%, Kospi is more than 2%, average cuts ranging from 2%-2.5% across Asian markets.

 

There will be talk on support levels:

 

There will be because looks like we will start below 19,000 for the Sensex . How much or to what extent can we come back because traders are looking at those kind of levels - 5,700 thereabouts, give or take 50 points for the Nifty around 19,000 mark broadly speaking for the Sensex. If those levels are broken and the market does not affect a quick comeback and stays above that at least in the second half of the day then sentiment will get hit quite a bit.

 

There is a lot to do on the F&O side of the market as well; lot of stock futures positions have got piled up. So if today there is a bad closing going into the Muhurat session tomorrow and next week given all that's happening around us in terms of global volatility, I think could be the tipping point for a bit of a correction.

 

But equally as I said earlier, if the market is able to hold out today then we have seen in the past those 4,000-5,000 Nifty become iconic kind of support levels and the market just goes there keeps banging but keeps moving back. So today the chances are that if we go to 19,000 odd and then find support and pull and close above that unless globally things break down the market will try and hold on to that level as an important support.

 

Psychologically at least that will become an important issue but if we break through 19,000 effortlessly, find it difficult to claw back today and there is more by way of future unwinding which puts a lot of pressure on key liquid F&O stocks then the mood might be broken today and then we may see a little bit more of a correction. So today's five hours of trading is quite crucial, I think.          

 

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