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Last Updated : Sep 19, 2019 07:22 AM IST | Source: Moneycontrol.com

A morning walk down Dalal Street | Nifty likely to consolidate, may stretch towards 10929, 10950

Experts feel the formation suggests a bearishness, but as supports are intact, the consolidation is likely to be seen in coming sessions.

Kshitij Anand @kshanand
 
 
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A volatile day for Indian markets as both Sensex and Nifty recouped losses and closed in the green. However, gains were capped ahead of FOMC outcome.

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The final tally on D-Street – the S&P BSE Sensex rose 82 points to 36,563 while the Nifty50 closed 23 points higher at 10,840.

Most experts feel that the US Fed will cut rates by 25 bps but more than the rate cut future commentary is something which will be in focus. Amid slowing global economic growth, analysts feel that there is a possibility of a 50 bps cut from the Fed in 2019.

Some good news: India VIX cooled off from highs, down more than 5%.

The impact of boiling crude oil prices was felt on common man as well. Petrol and diesel prices witnessed the biggest hike since July 5. Petrol prices rose 25 paise per litre to Rs 72.42 and diesel by 24 paise to Rs 65.82 per litre in the national capital.

Crude oil remained stable around $64/bbl on Wednesday.

The big news came from the cabinet. The government took a decision to ban E-cigarettes which led to over 1% rise in ITC, Godfrey Phillips saw a rally of nearly 6%, and VST Industries closed 3% higher.

Snapping its two-day falling streak, the rupee rebounded 54 paise to finish at 71.24 against the US dollar on Wednesday as sliding crude oil prices eased pressure off emerging market currencies

On the institutional front, FPIs were net sellers in Indian markets for Rs 959 cr, while the DIIs were net buyers to the tune of Rs 780 cr, provisional data showed.

Big News:

The Nifty50 turned negative for 2019 on September 17. But the situation only seems to be getting worse as more than 60 percent of the constituent companies registered the formation of a ‘Death Cross’ on the daily candlestick charts, indicating the potential for a major selloff.

In technical terms, the Death Cross is a technical chart pattern which points towards a potential for a major selloff in the stock or index. It is formed when the short-term moving average crosses below its long-term moving average.

Typically, the most common moving averages used by technical experts in this pattern are the 50-day and 200-day moving averages.

As many as 32 companies in the Nifty50 recorded a formation of Death Cross. These include Eicher Motors, Maruti Suzuki India, Bajaj Auto, Hero MotoCorp, Dr. Reddy’s Laboratories, Britannia Industries, and L&T among others.

In the Nifty500, as many as 350 stocks witnessed the formation of a Death Cross on the daily charts. These include MRF, Page Industries, 3M India, Eicher Motors, Wabco India, TTK Prestige, ICRA, Bosch among others.

Technical View:

Nifty formed a bearish candle on an intraday basis on daily charts as the closing level was lower than the opening level

The chart pattern is also known as the inside bar candle on the daily scale. An inside bar is a two-candlestick price pattern and is formed when price trades within the high-low range of the previous session.

Experts feel the formation suggests a bearishness, but as supports are intact, the consolidation is likely to be seen in coming sessions.

As long as Nifty holds above 10800 zones, the rally could stretch towards 10929 then 10950 zones.

On the downside supports are seen at 10750 then 10700 levels

Three levels: 10,637, 10804, 10885, 11000

Max Call OI: 11000, 11200

Max Put OI: 10800, 10600

Technical Recommendations:

We spoke to Religare Broking Ltd and here’s what they have to recommend:

Titan Company: Buy| LTP: Rs 1161| Target: Rs 1,200| Stop-Loss: Rs 1,110| Upside 3%

Jubilant Foodworks: Buy| LTP: Rs 1,243| Target: Rs 1340 | Stop-Loss: Rs 1,220| Upside 7%

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.



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First Published on Sep 19, 2019 07:22 am
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