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Nifty View
Nifty has been trading in the downward channel with
maintaining the negative trend. Nifty has made Bearish
Island Pattern with Gap-up on 27th Sept(4879-4905) and
Gap-down on 3rd Oct (4924-4879) which gives bearish
implication if this sustains for 2-3 trading days. Bearish
Island normally gives 8-10% as minimum target and if we
calculate 4430 is 10% while 4185 is 15%.
Nifty has immediate support around 4650 levels which is
the lower band of the downward channel. If this time the
support area is breached on closing basis for two to three
trading sessions then heavy sell off could not be ruled out.
Whereas on upside 5000 area has become critical
resistance area sustaining above these levels may give
pullback towards 5170-5250 levels.
Nifty has also made descending triangle and gave a breakdown
below 5177 and even during throwback Nifty only made
high of 5169 which become the crucial resistance area for the
market. Nifty has closed below 200 Weekly SMA i.e. 4805
levels which has negative implication and sustaining below it
would add further selling pressure to the market.
If we see the retracement calculation then 38.2% retracement
of the rally from 2252(Oct 2008) to 6338(November 2010)
comes around 4800 levels and sustaining below it may target
towards 50% i.e. 4300 levels.
Sensex View
Sensex after breaking down from descending
triangle around 17300, failed to cross in the throw
back where Sensex made 17200(approx) as double
top and started to correct. Sensex has closed below
all important 200Weekly SMA 16017 for 2nd time and
Sensex has made low of 86week below August low.
Sensex has completed 10 months of correction from
November 2010. Sensex close above 17800-18000
area for 3-4 trading sessions on closing basis only
will reverse the downtrend otherwise till Diwali the
downtrend may continue.
Sensex has been correcting every 2years,
starting from 1990-2010 and now this 2010
correction has achieved 25% cut from the top
around 15900 which is lowest made in 2006
which is considered bull market correction. But
now we have closed below 200Week SMA for
the 2nd time which normally happens to be a
bear phase correction where 33% has been
average which comes to14100.
Sensex has also made the Lower lows on
weekly charts supporting the downtrend view
Indian markets reactions to the global actions
With an eventful month our markets have seen the worst performance, not only for equity asset
class but sell off was seen in all asset classes. This quarter our markets (Nifty) have seen correction
of almost 13% which has been the worst quarter in last 11 quarters.
Global concerns are very big and are weighing heavy on our markets. The many uncertainties on
global front like the significant downside risk to the US economy, slowing of business activity in
Europe and China, Italy downgrade with Greece default fears have been haunting the markets and
the investors.
On domestic front also with Q1 GDP at 7.2% marginally lower then expected, disappointing IIP
data at 3.3% with weak growth in capital goods and close to double digit inflation has made the RBI
hike its rate by 25bps. Also the lower advance tax numbers this quarter hinting towards not so
encouraging Q2 results.
Also the political instability is postponing the reforms agenda which is again a hang over on the
markets sentiments.
Moody has also downgraded SBI on the concerns of rising interest rate, asset quality issues and
capital raising problems. This has again put pressure on the bank along with other banks also who
have overseas operations.
So overall the correction is mainly driven by global concerns, political uncertainty, fundamentals
and liquidity driven.
This is leading to crimping the foreign portfolios investments as a sharp fall in the rupee which
saw the lowest level in the 28 months further triggering FII’s stop losses and hedge, index funds
have turned heavy sellers since August.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Some more pain to conitnue...
Nifty has immediate support around 4650 levels which is the lower band of the downward channel. If this time the support area is breached on closing basis for two to three trading sessions then heavy sell off could not be ruled out. Whereas on upside 5000 area has become critical resistance area sustaining above these levels may give pullback towards 5170-5250 levels.
Nifty View
Nifty has been trading in the downward channel with
maintaining the negative trend. Nifty has made Bearish
Island Pattern with Gap-up on 27th Sept(4879-4905) and
Gap-down on 3rd Oct (4924-4879) which gives bearish
implication if this sustains for 2-3 trading days. Bearish
Island normally gives 8-10% as minimum target and if we
calculate 4430 is 10% while 4185 is 15%.
Nifty has immediate support around 4650 levels which is
the lower band of the downward channel. If this time the
support area is breached on closing basis for two to three
trading sessions then heavy sell off could not be ruled out.
Whereas on upside 5000 area has become critical
resistance area sustaining above these levels may give
pullback towards 5170-5250 levels.
Nifty has also made descending triangle and gave a breakdown
below 5177 and even during throwback Nifty only made
high of 5169 which become the crucial resistance area for the
market. Nifty has closed below 200 Weekly SMA i.e. 4805
levels which has negative implication and sustaining below it
would add further selling pressure to the market.
If we see the retracement calculation then 38.2% retracement
of the rally from 2252(Oct 2008) to 6338(November 2010)
comes around 4800 levels and sustaining below it may target
towards 50% i.e. 4300 levels.
Sensex View
Sensex after breaking down from descending
triangle around 17300, failed to cross in the throw
back where Sensex made 17200(approx) as double
top and started to correct. Sensex has closed below
all important 200Weekly SMA 16017 for 2nd time and
Sensex has made low of 86week below August low.
Sensex has completed 10 months of correction from
November 2010. Sensex close above 17800-18000
area for 3-4 trading sessions on closing basis only
will reverse the downtrend otherwise till Diwali the
downtrend may continue.
Sensex has been correcting every 2years,
starting from 1990-2010 and now this 2010
correction has achieved 25% cut from the top
around 15900 which is lowest made in 2006
which is considered bull market correction. But
now we have closed below 200Week SMA for
the 2nd time which normally happens to be a
bear phase correction where 33% has been
average which comes to14100.
Sensex has also made the Lower lows on
weekly charts supporting the downtrend view
BSE sector view - Power, no longer powerfull
TATAPOWER is looking weak on charts with making Lower Top Lower Bottom formation. Any pullback from the current levels till 110-114 levels may be used as an exit opportunity. Stock is also forming Inverse Pole & Flag pattern on weekly charts and breaking below 94-92 levels may give further 8-10% correction, caution is advised.
Indian markets reactions to the global actions
The general co-relation between the USDINR pair and Nifty
Whenever INR/USD has done a cross over the rise and fall in Nifty has been very high, Now after 2008 there is a cross-over and this could lead to major fall if this holds true.
Have we really de-coupled from the global markets…??
The answer is “NO”. We see that due to the rupee depreciation there is huge withdrawals happening cause of which we are seeing that dollar is strengthening. (From Jan – Aug 11 FII’s have been net sellers to the tune of Rs. 133crs and in the same corresponding period last year buyers of Rs. 59384crs).
So what can we say??
We can conclude that after buying of 59384 crs last year (Jan- Aug 10) and selling of 133 crs this year (Jan – Aug’11) by FII’s if there is no fresh buying then we may face lot of problems and with selling pressure continuing it is worsening the situation all the more.
It is also seen that in September lot of adjustments are done by the funds to manage their quarter ending NAV’s and coming October hedge funds give their request for maturity of their funds once a year which happens in October itself so selling pressure can continue.
People are also winding up their positions as they are in festive mood (Diwali) and waiting for the auspicious occasion to do fresh buying.
So considering this kind of scenario we may see some more selling pressure in the markets. This correction could be much faster than expected.
Indian markets reactions to the global actions
With an eventful month our markets have seen the worst performance, not only for equity asset
class but sell off was seen in all asset classes. This quarter our markets (Nifty) have seen correction
of almost 13% which has been the worst quarter in last 11 quarters.
Global concerns are very big and are weighing heavy on our markets. The many uncertainties on
global front like the significant downside risk to the US economy, slowing of business activity in
Europe and China, Italy downgrade with Greece default fears have been haunting the markets and
the investors.
On domestic front also with Q1 GDP at 7.2% marginally lower then expected, disappointing IIP
data at 3.3% with weak growth in capital goods and close to double digit inflation has made the RBI
hike its rate by 25bps. Also the lower advance tax numbers this quarter hinting towards not so
encouraging Q2 results.
Also the political instability is postponing the reforms agenda which is again a hang over on the
markets sentiments.
Moody has also downgraded SBI on the concerns of rising interest rate, asset quality issues and
capital raising problems. This has again put pressure on the bank along with other banks also who
have overseas operations.
So overall the correction is mainly driven by global concerns, political uncertainty, fundamentals
and liquidity driven.
This is leading to crimping the foreign portfolios investments as a sharp fall in the rupee which
saw the lowest level in the 28 months further triggering FII’s stop losses and hedge, index funds
have turned heavy sellers since August.
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