"SELL NIFTY BELOW 7550 TG 7520,7490 SL 7600 "
NIFTY
Start-long positions
at 7600. Start-short positions at 7520.
Big moves could go till 7700, 7445.
A long 7700 c (43), long 7500 p(96) could gain 10-15
BANK NIFTY
start-long positions at 16100. Start-short positions at
15800. Big moves could go till 16100,15500. Downtrend may continue.
The Nifty ended with yet another bold red candlestick as
after opening mildly in the green; the index entered an intraday downtrend and
also closed the day just below the important support level of 7500. The Sensex
pared some losses after falling over 300 points in the early trade on Monday
and closed 109 points down at 24825 following weak global cues. Nifty settled
37 points down at 7563. Sentiments remained dampened since morning as markets
made a gap-down start as investors remained on sidelines ahead of Q3 earning
season which is due to start tomorrow with TCS and IndusInd Bank unveiling the
numbers. Traders also remained concerned with a private report stating that
consumer sentiments in India fell for the fourth consecutive month in December
to the lowest on record, as consumers reported a further deterioration in their
personal finances amid rising inflation.
While a close below 7540 is a negative outcome by itself, a
sustained move below 7500 can confirm a further breakdown in the index and can
open downsides towards 7300 in quick time. The action in options suggests 7300
as the next important support in case 7500 is breached as the two strikes are
having the highest Open interest at close to six million. For the short term
trend to reverse from here, a breach of 7620 will be the essential and as long
as below the level, any pullback attempt is likely to be met with strong
resistance. Today’s close for the Nifty is a fresh 52 week low close which thus
makes short term trend extremely cautious.
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Supports: 7,600 and 7,580
Resistances: 7,630 and 7,650
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