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After The Bell: Did Nifty made a top? Here’s what should investors do on Thursday

The index has to cross and hold above 15,600 zones to witness an up move towards 15,750 and a fresh lifetime high of 15,800 zones while on the downside support exists at 15,550 and 15,400 zones, suggest experts.

June 09, 2021 / 05:46 PM IST
The market breadth, which was extremely positive in the first half of the trading session, turned negative in the second half as the market closed below the levels of 15,670/52,100.

The market breadth, which was extremely positive in the first half of the trading session, turned negative in the second half as the market closed below the levels of 15,670/52,100.

Weak global cues and profit booking at higher levels pushed benchmark indices lower for the second consecutive day on June 9. The Nifty50, which hit a record high of 15,800, failed to hold on to gains and closed with a cut of over 100 points while the S&P BSE Sensex also broke below 52,000.

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 333 points to 51,941 while the Nifty50 closed 104 points lower at 15,635.

On the broader markets front – the S&P BSE Midcap index fell 0.7 percent, and the S&P BSE Smallcap index was down by nearly 1 percent.

"Domestic market witnessed profit booking due to dull opening of European markets. Global investors remained cautious ahead of European Central Bank (ECB) policy decision and US inflation data to be released on Thursday,” Vinod Nair, Head of Research at Geojit Financial Services said.

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“ECB is expected to continue its bond-buying policy to support a recovering economy. And US inflation is forecast to be high but transitory, both these factors, if inline, will provide comfort to the market,” he said.

Sectorally, the rally was seen in Utilities, power, and consumer durable stocks while profit booking was seen in energy, oil & gas, realty, and capital goods.

The Nifty50 still trades above crucial support levels which is a positive sign for the bulls. The selling pressure will increase if the index fails to hold on to the immediate support placed at 15,575-15,600 levels on Thursday (weekly expiry day).

IndexPricesChangeChange%
Sensex58,696.7047.02 +0.08%
Nifty 5017,482.4512.70 +0.07%
Nifty Bank37,068.65-216.05 -0.58%
Nifty 50 17,482.45 12.70 (0.07%)
Thu, Dec 09, 2021
Biggest GainerPricesChangeChange%
ITC233.908.95 +3.98%
Biggest LoserPricesChangeChange%
HDFC Bank1,524.70-29.10 -1.87%
Best SectorPricesChangeChange%
Nifty FMCG38043.70383.80 +1.02%
Worst SectorPricesChangeChange%
Nifty Bank37069.20-215.50 -0.58%

“A day before the 2nd weekly expiry the Nifty saw a sharp sell-off. There was a strong resistance at 15,800 levels and the Index has reversed from the same. On the lower side, the immediate support is in the range of 15,575-15,600,” Jay Thakkar - VP and Head of Equity Research at Marwadi Shares and Finance Ltd said.

“The short term range for the Index is 15,575-15,800 levels, however, with the sell crossover in its momentum indicator MACD with a negative divergence it appears that the short-term trend has reversed from up to down,” he said.

He further added that the index is now likely to trade with a negative bias till it does not close above 14,750 levels on a closing basis.

“In the short term if at all there is a bounce till 15,700-15,720 levels which is likely as a wave B bounce then it should be utilised as a selling opportunity,” Thakkar added. Traders can sell on rise and buy on dips i.e. taking contra trades strategy should be adopted.

Here’s what experts suggest investors should do on June 10:

Expert: Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services

The Nifty50 formed a strong Bearish candle on the daily scale as it engulfed the price recovery of the last four sessions and negated its formation of higher lows of the last four trading sessions.

It has to cross and hold above 15,600 zones to witness an up move towards 15,750 and fresh lifetime high of 15,800 zones while on the downside, support exists at 15,550 and 15,400 zones.

Ajit Mishra, VP - Research, Religare Broking Ltd.

The market move has been quite positive for a few weeks led by stable global cues and receding cases in India. The mood is quite positive and it is only a matter of time that Sensex scales new highs in coming sessions.

We’re seeing profit-taking and it’s healthy; however, volatility remains high during such a corrective phase which easily unsettles the participants. We thus advise keeping extra caution in managing overnight risk and preferring low beta counters over others.

On the benchmark front, the previous high zone around 15,400 would act as critical support in case of further correction while 15,800 will continue to act as an immediate hurdle.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

Strong rejection at 15,800/52,500 levels resulted in a vertical decline in the market. The Nifty/Sensex fell to 15,565/51,717 in a short span of time.

The market breadth, which was extremely positive in the first half of the trading session, turned negative in the second half as the market closed below the levels of 15,670/52,100.

It’s a bearish reversal formation for the market and in the next one or two sessions, the market may fall to 15,500 or 15,450 (51,600/51,300) levels.

The sell-off was mainly in small-cap and mid-cap stocks, which had seen strong momentum over the past few weeks, while other sectors too displayed weakness today. Buy in select companies, if Nifty falls to 15,500/15,450 (51,600/51,300) levels.

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.

Kshitij Anand is the Editor Markets at Moneycontrol.

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