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Last Updated : Jan 04, 2019 07:11 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Break below crucial support at 10600 would extend fall further towards 10500

It is time to remain on sidelines and wait for a breakout above 10950 to go long and a breakdown below 10600 to go short on the index.

Kshitij Anand @kshanand
 
 
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The dark clouds continue to hover around D-Street as Nifty fell another 100 points to close the day below 10700 levels on Thursday. Weak global cues could be blamed for the fall in the markets while weakness in metals and autos continue to drag markets lower.

The collapse in equity markets in the past two sessions has led investors to lose over Rs 2.66 lakh crore, according to data available on the BSE.

The S&P BSE Sensex plunged 377 points for the second consecutive day in a row, a start to the New Year which no one was hoping for. In terms of Nifty, the index dropped 120 points to close at 10,672.

Sectorally, the S&P BSE Metal index dropped 2.3%, followed by the Oil & Gas index which was down 1.7%, and Capital Goods index dropped 1.6%.

The S&P BSE Midcap index plunged 1.03% while the Small-cap index was down 0.58%.

So what really led to the fall in markets? Well, weak global cues to start with was a big overhang to start with, apart from that weakness in metals as well as auto-names dragged the Indian market for the 2nd consecutive day in a row.

Metal stocks were weighed down by economic growth concerns especially in China while Auto stocks tumbled as monthly sales numbers were a mixed bag for December on a y-o-y basis. PV sales bounced back while CV segment sales remained laggard in December 2018 on a y-o-y basis.

The rupee weakened for the second straight session on January 3, slipping by 2 paise to 70.20 against the US dollar on robust foreign fund outflows amid rising trade deficit worries.

On the institutional front, foreign portfolio investors were net sellers in India markets for Rs 972 crore while DIIs were net buyers to the tune of Rs 34 crore.

Technical View:

Technically, Nifty formed a bearish candle and now a break below its crucial support at 10634-10600 would extend the fall further towards 10500 levels. A break below 10600 would also change the trend going by ‘Supertrend’ indicator.

It is time to remain on sidelines and wait for a breakout above 10950 to go long and a breakdown below 10600 to go short on the index. In case we see a pullback because we are trading near support levels then go short with a stop below 10790.

Three levels: 10661-10650, 10814, 10900

Max Call OI: 11000, 11500

Max Put OI: 10000, 10500

Stocks in news:

Nestle India: The Supreme Court revived the government case in National Consumer Disputes Redressal Commission (NCDRC) against Nestle India seeking damages of Rs 640 crore alleging unfair trade practices, false labelling, and misleading advertisements.

Homegrown retail major Future Enterprises said it has raised Rs 750 crore by allotting non-convertible debentures (NCDs) on a private placement basis.

Non-banking financial company Shriram Transport Finance Company Thursday said it plans to raise up to Rs 700 crore through non-convertible debentures (NCDs).

Jagran Prakashan Ltd (JPL), the publisher of leading Hindi daily Dainik Jagran, Thursday said its board has approved raising up to Rs 300 crore through issuance of non-convertible debentures (NCDs).

Technical Recommendations:

We spoke to IIFL and here’s what they have to recommend:

Ujjivan Financial Services: Buy| Target: Rs 305| Stop Loss: Rs 275| Upside 7%

Indiabulls Housing Finance Jan Futs: Sell| Target: Rs 770| Stop Loss: Rs 833| Downside 5%

Marico: Buy| Target: Rs 400| Stop Loss: Rs 367| Upside 6%

Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jan 4, 2019 07:11 am
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