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After The Bell: Market fall ahead of US Fed decision; what should investors do on Thursday?

The Nifty index has to hold above 15750 zones to witness an up move towards 15900 and 16000 zones while on the downside support can be seen at 15700 and 15600 zones, suggest experts.

June 16, 2021 / 05:22 PM IST

Indian market snaps 4-day winning streak on Wednesday and closed in the red ahead of the outcome of the US Federal Reserve meeting later today. Most experts feel that the US central bank is likely to leave rates unchanged.

“All eyes are on the US Fed rate decision which is scheduled tonight. We expect the Fed to maintain the status quo on rates however commentary on economy and inflation would be actively tracked by investors,” Ajit Mishra, VP - Research, Religare Broking Ltd said.

“Traders should limit naked leveraged positions and wait for further clarity. We expect volatility to remain high in the indices due to scheduled weekly expiry. In case of a further slide, Nifty would find support around 15,600-15,650 zone on Thursday,” he said.

Let’s look at the final tally on D-Street – the S&P BSE Sensex was down 0.7 percent to 51,543 while the Nifty50 saw a triple-digit cut to close at 15,767.

Sectorally, buying interest was seen in FMCG, as well as IT stocks while profit booking was visible in metals, industrials, energy, capital goods, and power stocks.

Close

On the broader market front – the S&P BSE Midcap index fell 0.9 percent, and the S&P BSE Smallcap index was down by nearly 1 percent.

Here’s what experts suggest investors should do on June 17:

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

IndexPricesChangeChange%
Sensex54,369.77546.41 +1.02%
Nifty 5016,258.80128.05 +0.79%
Nifty Bank36,028.05820.60 +2.33%
Nifty 50 16,258.80 128.05 (0.79%)
Wed, Aug 04, 2021
Biggest GainerPricesChangeChange%
HDFC2,676.05121.40 +4.75%
Biggest LoserPricesChangeChange%
Grasim1,554.85-37.55 -2.36%
Best SectorPricesChangeChange%
Nifty Bank36028.05820.60 +2.33%
Worst SectorPricesChangeChange%
Nifty Midcap 10027928.20-337.50 -1.19%

Technically, Nifty50 formed a Bearish candle on a daily scale and wiped out all the gains of the last few sessions.

Now, the index has to hold above 15750 zones to witness an up move towards 15900 and 16000 zones while on the downside support can be seen at 15700 and 15600 zones.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty saw a dip on June 16 following a Doji pattern that was formed on June 15. The hourly chart shows that the index had reached the upper end of a rising channel & moved down from there.

In terms of the Fibonacci retracement, the Nifty has retraced 50% of the recent rise from 15606 to 15901. Going ahead the 61.8% retracement mark i.e. 15720 & the lower end of the rising channel i.e. 15700 will be the key support zone to watch out for.

The bulls are expected to initiate a fresh round of buying near 15720-15700, which will put the index back on an upward trajectory. The initial short-term target on the upside continues to be at 16000.

Jay Thakkar- VP and Head of Equity Research at Marwadi Shares and Finance Ltd.

The Nifty, as well as Nifty Bank, closed in the negative territory for the day ahead of the weekly expiry. The Nifty had a strong resistance at 15900 levels wherein there was the highest OI on the call front and that acted as a hurdle on the way up.

The daily momentum indicator has now gone into the sell mode whereas the hourly is already into the sell mode with a negative divergence.

From here on, the Nifty is likely to test 15700 on an immediate basis, and if that level breaks then it will extend its fall till 15600 levels.

The Nifty bank, however, looks better than Nifty wherein it has got a good support range of 34500-35000 and till this range is held it can continue to trade sideways as or with the positive bias. The resistance on the upside is pegged at the 35300-35500 range.

Rohit Singre, Senior Technical Analyst at LKP Securities.

After forming a Doji candle pattern in Tuesday’s session, the Nifty formed a bearish candle on the daily chart, and has given a close at 15756 with a loss of nearly one percent.

The Nifty50 reached its good support zone of 15750, and if it breaks then some more slide towards the next support zone of 15650 is possible.

If the index manages to hold above this support zone then some decent pullback can be witnessed towards the 15850-15900 zone where one can again lock their gains in longs.

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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