elegantNifty closed near critical support levels and needs to hold above there to avoid further correction. (Photo: Reuters)

Bears continued to dominate the momentum of Dalal Street, forcing benchmark indicators to close deep in the red for the third day in a row. The S&P BSE Sensex closed 677 points or 1.13% lower at 59,306 while the NSE Nifty 50 closed 185 points or 1.04% in red at 17,671. The Sensex is down 1.9% this week while the Nifty 50 is down 2.2%. Nifty Bank closed Friday’s session 1% lower at 39115. Analysts believe that Nifty closed near critical support levels and needs to hold above there to avoid further correction.

Manish Hathiramani, Equity Index Trader and Technical Analyst, Deen Dayal Investments

“Markets closed at a critical point. Today Nifty bottom has become a support for the short term trend. If we break 17550-17500, sell signals will be activated which could pull the indicator down to 17200. On the upside there is a severe resistance 17900 and any expectations of a buy side trade will emerge Only after this level. Stops are wide and traders should be very careful.”

Rohit Singri, Senior Technical Analyst at LKP Securities –

“After the week showed strong volatility, the index closed weekly at 17,672 with a loss of more than 2% and formed a bearish candle after forming a breakout candlestick last week indicating weakness. On the daily chart, the index reached the good support area 17600-17500 from where we have seen A good move towards the 18600 area, so if the mentioned levels survive, one can once again expect a decent pullback towards the 17800-17900 area which is the immediate resistance as well. On the upside, a new move is only possible above the 18k mark.”

Sachin Gupta, Associate Vice President, Research, Choice Brokerage –

“On the technical chart, the nifty indicator got immediate support from the previous swing lows and the lower Bollinger Bands formation. The nifty also tested the support at the 50 day simple moving average and closed above it. However, some important major indicators like the RSI have seen RSI, Stochastic and MACD some weakness. At the moment, the indicator has immediate support at 17650 levels while resistance comes in at 17900 levels.”

Joseph Thomas, Head of Research, Emkay Wealth Management –

Stock markets headed lower during the week due to selling pressure from the fisheries industries. FIIs were net sellers at over Rs. 20 thousand crores for the month of October. Valuation risk was a major concern for foreign investors, sparked by the downgrade of Indian stock markets from “overweight” to “neutral” by major global brokerages. Valuation risks in particular are coming to the fore now as few sections of the market expect growth momentum to slow in the wake of flat inflation.”

Ajit Mishra, Vice President – Research, Religare Broking –

“Earnings disappointment combined with weak global signals are weighing on sentiment. Aside from earnings announcements, participants will closely monitor the upcoming US Federal Reserve meeting and auto sales numbers for clues. Indicators are pointing to more slides so the next US Federal Reserve meeting should be closely watched. Participants maintain a cautious approach and prefer a hedging approach.”

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