13 October 2016


Indian markets today fell sharply, with the Nifty taking out the key 8600 level with ease while the Sensex broke below 28000. Nifty fell to its lowest level in three months on Thursday as caution ahead of key quarterly results dragged down heavyweights in financial, technology and industrial sectors, with weak Chinese data hurting global risk appetite. The Sensex ended today’s trading with a loss of 439 points at 27643. It opened at 28043, touched an intra-day high of 28043 and low of 27643. The NSE Nifty closed with a loss of 135 points at 8573. It opened at 8672, hit an intra-day high of 8682 and low of 8541.
The market is showing correction. The full brunt of the market fall is not yet played out and there could be legs to the correction. While it is too early to say if this is a firm trend reversal, the Nifty has now retreated from a recent top of nearly 8,900 to about 8,575 now, signally a pretty deep cut to equities. On the upside, the contract has significant resistances at 8700 and 8750 levels. A conclusive rally above the second resistance is needed to strengthen the bullish momentum and take the contract up to 8800 and 8900 in the same period. Therefore, traders with a short-term perspective should desist from trading in the index futures contract as long as it trades in the sideways band between 8600 and 8530.

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Supports: 8600 and 8530
Resistances: 8700 and 8750

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