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Last Updated : Sep 25, 2018 07:45 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty can stabilize if it reclaims 11,170, pull back rally on the cards

A close below Friday’s low of 10,866 could extend selling pressure while stability could come in if Nifty manages to reclaim 11,170.

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Indian markets fell for the fifth consecutive day in a row on Monday.

The S&P BSE Sensex closed 536 points lower at 36305 while the Nifty50 ended 175 points down at 10,967

The Nifty50 slipped below its 100-EMA as well as 11000 to close at 10,967

Weak rupee, higher crude oil prices, NBFCs woes weighed on markets which led massive sell off in markets. Investors lost around Rs 3 lakh crore on the BSE during the session as a fallout of this bearish move.

Technically, the index formed a Bearish Belt Hold pattern and there is a higher chance of a short coverings rally as we inch closer to expiry.

A close below Friday’s low of 10,866 could extend selling pressure while stability could come in if Nifty manages to reclaim 11,170.

Sectorally, realty, auto, finance and telecom stocks fell 3-5 percent while IT stocks outperformed, up 2 percent.

Top Sensex gainers: Tata Consultancy Services, Coal India, Infosys, Reliance Industries

Top Sensex losers: Mahindra & Mahindra, HDFC, IndusInd Bank, Adani Ports

The S&P BSE Smallcap index was down 2.7 percent while the BSE Midcap index plunged 2.4 percent.

Big News:

The carnage in the market started from last week

Main factors: Depreciating Rupee, rising Crude oil prices which are trading near $80/bbl, and fears of default in housing finance companies led to sharp fall in their stock prices.

Some participants feared that because of IL&FS’s default, funding cost for NBFC’s will zoom and result into sharp deterioration in their margins.

Experts say that losses in leveraged positions are leading to selling in other stocks to cover those losses which in turn fueling further losses in markets.

Investors lost Rs 8.48 lakh in market capitalisation since September 14

Sensex lost 1785 points (14 September: 38,090; September 24: 36,305)

Nifty lost 548 points (September 14: 11,515; September 24: 10,967)

Nifty trading below crucial short term moving averages such as 5,13,250,100-EMA

Technical View:

Nifty formed a Bearish Belt Hold kind of pattern

Next support will come at 10,866-10750

Three levels: 10866, 11000, 11170

Max Call OI: 11500, 11300

Max Put OI: 11000, 10800

Technical Recommendations:

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

Axis Bank: LTP: Rs 597| Buy| Target: Rs. 645 | Stop loss Rs 570 | Return: 8%

Deepak Nitrite: Buy| LTP: Rs 270| Target: Rs. 295 | Stop loss Rs 255 | Return: 9%

Karnataka Bank: Sell| LTP: Rs 101| Target: Rs. 90 | Stop loss: Rs 106 | Return 10%

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 Sep 25, 2018 07:14 am
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