Nifty is likely to reclaim 12,000 level on January 7 supported by strong global cues, and stable crude oil prices.
Trends on SGX Nifty indicate a positive opening for the index, with a 68 points gain, or 0.56 percent up move. The Nifty futures were trading around 12,116-level on the Singaporean Exchange.
The S&P BSE Sensex plunged nearly 800 points on January 6 to register its biggest single-day fall in a year while Nifty50 breached 12,000 to post its biggest one-day fall in six months.
Volatility index surged over 16 percent, the biggest single-day gain in a year.
Rising Middle-East tensions wiped out almost Rs 3 lakh crore in terms of market wealth on Monday, pushed crude oil prices towards $70/bbl, and rupee to its lowest level since November 14.
Let’s look at the final tally on January 6 on D-Street – the S&P BSE Sensex plunged 787 points to 40,676 while the Nifty50 dropped 233 points to 11,993.
Sectorally, profit-taking was seen in metals, the public sector, realty, banks, energy and oil & Gas.
The rupee plunged 13 paise to settle at 71.93 against the US currency on January 6, mainly weighed down by the spike in global crude oil prices as escalating US-Iran tensions fanned fresh fears of conflict in the Middle East
On the institutional front, FPIs were net sellers in Indian markets for Rs 103 cr while the DIIs were net sellers to the tune of Rs 23 cr, provisional data showed.
Technical View:
The Nifty50 formed a Long Black Day kind of candle on the daily charts and Supertrend indicators triggered a SELL signal on Nifty
The last time it triggered a Sell was back in July, and Nifty made a low of 10,637 before bouncing back.
In this corrective move, the ideal target for Nifty shall be in the zone of 11860 – 11832 levels where this pattern shall get culminated.
Nifty50 closed below 50-DMA placed at 12014 but took support near 50-Days EMA placed near 11,977
Hence, Monday’s low of 11,974 will be an important level to track on Tuesday. A break below this level could take the index towards 11,860-11832 levels, suggest experts.
Meanwhile, upsides shall remain capped in the zone of 12179 – 191 levels. Therefore for time being traders are advised to remain neutral whereas intraday traders can consider shorting if Nifty trades below 11974 levels, they say.
Three levels: 11974, 12179, 12293
Stocks in news:
HDFC Bank: Advances in Q3FY20 jumped 20 percent to Rs 9.34 lakh crore, deposits grew 25 percent to Rs 10.67 lakh crore YoY.
VST Tillers Tractors: Power tillers sales in December increased 4.3 percent to 1,410 units, tractors sales dipped 39.2 percent to 366 units YoY.
Bank of Maharashtra: The lender said it has reduced its marginal cost of funds based lending rates (MCLR) by up to 45 basis points across various tenors, effective from January 7.
Technical Recommendations:
We spoke to HDFC Securities and here's what they have to recommend:
Gujarat State Petronet | Buy | LTP: Rs 237.50 | Target: Rs 254 | Stop loss: Rs 222 | Upside: 7%
NIIT Technologies | Buy | LTP: Rs 1,654 | Target: Rs 1,750 | Stop loss: Rs 1,573 | Upside: 6%
IndusInd Bank | Sell | LTP: Rs 1,470.90 | Target: Rs 1,397 | Stop loss: Rs 1,538 | Downside: 5%
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