INSUBCONTINENT EXCLUSIVE:
Friday’s session witnessed immense volatility on Dalal Street as the Nifty50 swung nearly 500 points and recovered over 300 points to end
the day losing 91.25 points, or 0.81 per cent.
The panic came following a gory meltdown in the shares of banks and financial services
companies, as investors feared a few of these companies might not be able to roll over their loans and service their immediate short-term
debt obligations.
Nifty might face resistance around 11,210 and 11,290 levels.NBFCs literally saw a bloodbath, which spread to other
quarters of the market, which got affected badly.
Going into a fresh week, we have more than one critical issue to deal with
We face the expiry of the September series derivative contracts and there will be rollover-infused volatility to deal with.
In the wild
moves seen on Friday, the Nifty50 not only slipped below the important pattern support at 11,170, but also slipped well below the 100-DMA,
However, the Nifty50 managed to end well above that following a smart recovery.
The market is likely to see a shaky start on Monday and we
In the event of any weakness, the 100-DMA level at 11,025 will be extremely important to watch out for at close
We are likely to witness volatile oscillations before the market stabilises and inches higher.
On the higher side, Nifty might face
resistance around 11,210 and 11,290 levels
The RSI on the daily chart stood at 53.8861
It has marked a fresh 14-period low and this is a bearish signal
A bearish divergence was also seen, as the RSI marked a fresh 14-period low, while the Nifty did not
The daily MACD continued to remain bullish even as it traded above its signal line.
Given all these facts, by no means this is a situation
that investors need to react to with panic
Going out of the way from a technical view, we would strongly recommend traders and investors to refrain from reacting on any rumours but
rather plan and protect their exposure to the market
We expect some shaky moves in the market and before it stabilises, some rangebound volatile oscillations are possible.
It is important to
note that unless the previous week’s low of 10,866 is taken out, Nifty’s primary uptrend will remain intact and the market will remain
well inside the 29-month-long upward rising channel on the higher timeframe charts.
We recommend traders to preserve liquidity and refrain
from taking any aggressive bets on either side until stability returns and Nifty shows a definite directional bias
Nifty moving past the 11,170 mark and trading above this mark would be important to avoid any major weakness.
A highly cautious view is
advised for the day.
Stocks to watch:Traders continued to pile up shorts on stocks like Adani Power, Yes Bank, IDFC, IDFC Bank, TV18
Broadcast, Reliance Power, South Indian Bank, ICICI Bank, Idea, SAIL, Ashok Leyland, HCC, Tata Motors, Nalco and CG Power.
(Milan Vaishnav,
CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
