Its absolute mayhem for the markets. The Nifty and Sensex nosedived to new lows as the correction continued across the indices. The benchmark indices saw profit booking at higher levels, the Nifty shed 324 points and closed at 23,559 while the Sensex slumped 984 points to shut shop at 77,690. Profit booking was seen across sectoral indices at higher levels and Realty Index saw the maximum cut at 2.25 percent. Auto and metal stocks too saw deep cuts. Broader indices also experienced a sharp decline, each losing over 2.5%.
Nifty- Key levels to watch
Nifty has now corrected more than 10% from its record high. That essentially raises the question that what would be a key level to watch out for now?
Ajit Mishra – SVP, Research, Religare Broking said that “alongside with the benchmark index, banking index, midcap and smallcap indices also retested their long-term support levels at the 200 DEMA today. This confluence of support and oversold conditions might trigger a rebound, although any recovery could be limited to select stocks. Traders are advised to monitor positions closely and maintain a hedged strategy.”
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Given the fact that selling pressure was seen at higher levels, Shrikant Chouhan, Head Equity Research, Kotak Securities pointed out that “bearish candle on daily charts indicating further weakness from the current levels. We are of the view that, the current market texture is weak but oversold hence; we could expect one quick intraday pullback rally from the current levels. For the traders now, 200 day SMA (Simple Moving Average) or 23500/77500 would act as a sacrosanct support zone. Above the same, we could expect one technical bounce back till 23800-23850/78300-78500. On the flip side, fresh selloff possible only after dismissal of 23500/77500. Below which, it could slip till 23380-23350/77200-77000.”
Macro data and earnings the big worry
Most market observers believe that inflation at 14-month high and earnings are the key worry points for the investors.
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