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Last Updated : Sep 10, 2020 05:26 PM IST | Source: Moneycontrol.com

After The Bell: Bulls bounce back, here’s what investors should do on Friday

A long bull candle was formed with a gap-up opening and the opening upside gap remains unfilled. This market action could bring some hopes for the bulls to make a comeback from the lows.

After two days of losses, the bulls pushed Nifty50 above 11,400 on September 10, supported by positive global cues and a smart rally in Reliance Industries that hit a fresh record high with a market cap of $200 billion.

The S&P BSE Sensex rose 646 points to 38,840 while the Nifty50 ended the day 171 points higher at 11,449.

Sectorally, action was seen in energy, oil & gas, public sector and capital goods stocks while profit-taking was visible in telecom and metal space.

Close

Experts said the price action will give confidence to the bulls but a close above 11,550-11,600 is required for the uptrend to sustain. Geopolitical concerns or a selloff in US markets could drag the indices lower.

A long bull candle was formed with a gap-up opening and the opening upside gap remains unfilled. This market action could bring some hopes for the bulls to make a comeback from the lows.

“The Nifty is currently placed at the cluster resistance of opening downside gap area of September 4, minor up sloping trend line on the daily and significant intermediate trend line on the weekly chart (as per role reversal) around 11,450-11,500 levels. Hence, this area is going to be a crucial hurdle for the market in the short term,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities told Moneycontrol.

"A renewed buying participation could only occur above this resistance. Technically, the formation of a bearish engulfing pattern of the daily and weekly timeframe are indicative of an important reversal point for the market.”

As long as the high of that engulfing candle pattern is protected at 11,794, the underlying short term is to be considered as a weak or choppy, Shetti said.

“Unless the upside area of 11,500-11,550 is crossed decisively on the upside, the selling pressure can't be ruled out from the highs in the next few sessions. Immediate support is placed at 11,360,” he added.

We have collated the views of experts on what investors should do on September 11:

Vikas Jain, Senior Research Analyst at Reliance Securities

The Nifty is trending between the short and medium-term averages and a breakdown below the 50-day average placed at 11,180 would push the markets lower. On the higher side, multiple resistances at 11,650-11,700 levels would cap the upside.

The breadth continues to remain weak with swift correction in midcaps and small-cap indices from their recent highs after a sharp up move over the previous few months.

Geopolitical concerns between India and China and global market volatility would continue to weigh on markets in the immediate term depending on the news flow.

Rohit Singre, Senior Technical Analyst at LKP Securities.

The index closed the day at 11,449 with good gains of 1.5 percent after almost five negative sessions and formed a bullish candle on the daily chart.

The index has formed good support near the 11,390-11,350 zone and if it manages to hold above the said levels, we may see some more gains in the coming session towards the 11,500-11,550 resistance zone.

Ajit Mishra, VP - Research, Religare Broking Ltd

Apart from the global cues, participants will now be closely eyeing the upcoming macroeconomic data, which is IIP and CPI data for cues on economic recovery. Besides, the on-going tensions between India and China will also be on investors' radar.

We may see a further rebound and the Nifty could take a breather around the 11,520 level. Traders should prefer stocks that are participating in the move rather than betting on underperforming counters in anticipation of a rebound.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

In the last session, the Nifty had taken support near the junction of the 40 DEMA, the daily lower Bollinger Band and the lower end of a rising channel. On the hourly chart, the index formed a wedge pattern where the lower end acted as a support on September 9.

On September 10, the Nifty has taken a leap from these supports. It has entered a gap area of 11,452-11,507, which was created recently on the daily chart.

Once this gap is filled up, the index will head towards the upper end of the short-term range, which is at 11,585. On the flip side, 11,350-11,330 will act as immediate support for the index.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Sep 10, 2020 05:26 pm
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