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After the Bell: Nifty snaps 8-day winning streak; what should investors do on Friday?

As long as the market does not break the 12530 levels, we should stick to the strategy of buy on dips. Another round of buying in financial stocks is more likely in the near future, suggest experts.

November 12, 2020 / 04:35 PM IST

Indian markets snapped an 8-day winning streak and closed in the red on November 12 tracking muted global cues and investors preferred to book profits at higher levels.

The S&P BSE Sensex fell by more than 200 points while the Nifty50 closed below the crucial support at 11,700 levels.

Atmanirbhar Package 3.0 announced by the finance minister is positive, but investors preferred to book profits as most of the positives are factored in.

"Market was hesitant to raise its optimism further as profit booking was triggered across the banking sector post the announcement of the stimulus. The market was waiting for the package, Atmanirbhar Bharat 3.0 was announced today which was good enough and nicely factored in the rising market,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“FM’s new measures will have a positive impact on developers and home buyers due to tax reliefs and will ensure demand for housing which is on a strong recovery stage,” he said.

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Nair further added that the subsidy announcement of Rs65,000 Cr for fertilizers is likely to help rural & agricultural sectors. Expansion of Production Linked Incentive (PLI) scheme to additional 10 sectors will boost domestic manufacturing, in the long-term"

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 236 points to 43,357 while the Nifty50 was down 58 points to close at 12,690.

Sectorally, the action was seen in FMCG, Capital Goods, Realty, and Capital Discretionary stocks while profit-taking was visible in banks, public sector, and energy space.

Here is what experts think that investors should do on November 13:

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

The markets took a breather after eight consecutive days of gains. The Nifty 50 remained in a narrow range of 120 points and formed a Doji candle on the daily chart.

We can say that this is a consolidation window that the Nifty has opened and is preparing to move to the level of 12950/13000 on the eve of Diwali.

As long as the market does not break the 12530 levels, we should stick to the strategy of buy on dips. Another round of buying in financial stocks is more likely in the near future.

Arjun Yash Mahajan, Head - Institutional Business at Reliance Securities.

Having witnessed a continued rebound for the last eight trading days, domestic equities finally took a pause today and profit booking was visible in financial stocks. However, the announcement of fiscal stimulus under Atmanirbhar Bharat 3.0 by the Finance Minister offered some support, which was mainly focused on job creation and pick-up in infrastructure developments in the country.

Notably, a large number of mid-cap and small-cap stocks witnessed a decent rebound today with emerging clarity over corporate earnings in the backdrop of favourable commentaries from various managements and the government’s serious efforts to spur investment activities in the country.

We remain cautiously optimistic about the market and continued rise in Covid-19 cases across Europe and the USA and resulted in restrictions are likely to be a near-term concern for the markets.

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

The Nifty index opened negative and traded lower as it could not surpass the immediate hurdle of 12750 zones. It remained consolidative in the range of 100 points for the most part of the session and closed the day lower by 55 points.

It formed a small Doji with an Inside Bar which is a Harami Cross pattern on daily scale indices a pause in positive momentum if any follow up happens. It negated its higher high formation of the last seven sessions but hasn’t breached the previous day’s lows which keeps the bullish bias intact.

Now it has to continue to hold above 12550 zones to witness an up move towards 12800 and 12900 zones while on the downside major support exists at 12430 zones.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in

In the next trading session unless Nifty trades above 12769 levels the trajectory of the market shall remain sideways with negative bias but a close below 12571 can be a harbinger of a fresh leg of short-term downswing which if materialises shall initially drag down the index towards 12350 levels.

Contrary to this a fresh upsurge with a close above 12800 levels can extend the rally towards 13k levels.

For time being as our twin momentum oscillators generated a sell signal we expect the market to move sideways with negative bias in the next couple of trading sessions, therefore, advise short-term traders to avoid creating long positions in haste on this dip.

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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