Markets slipped in trade today erasing all the gains made so far in 2016. With
the market switching back to the selling mode, the Sensex and the NSE Nifty, which had ended higher last Friday, snapping a seven-day losing streak
is all set to end on a weak note today. Amid lingering concerns about near term
liquidity and largely sluggish global markets and lack of clarity with
regard to the remarks about tax on financial market gains, investors are quite
wary of picking up stocks today. As tax worries loomed large Sensex and
Nifty tested their 52-week lows in intra-day trade even though Finance Minister
Arun Jaitley tried to calm frayed nerves. PM Narendra Modi’s statement that
those who make money from the markets are not paying their fair share in taxes
made investors nervous. The Nifty is now negative for 2016 erasing all gains made
so far this year and also ending at its lowest level in 2016. Midcaps got
battered in trade. The market is off the day's low now, but the key indices are
nevertheless, in line for dismal close. The Sensex, which had declined to 25753
earlier in the day, losing nearly 270 points in the process, is now down 211
points at 25829. The Nifty is down 70 points at 7915, off the day's low of
7893.
Breaching key supports at 7980 and 7950 levels, the contract
recorded an intraday low at 7915 levels. The contract is down 1% now. The
near-term outlook is bearish as the contract has decisively breached key
supports and is hovering below them. Traders with a short-term perspective can
make use of rallies to initiate fresh short positions with a stop-loss at 8000
levels. Continuation of the down move can make the contract retest the supports
at 7850 and then 7800. Further fall below 7800 can find supports at 7750 and 7700
levels. On the other hand, key resistances are placed at 8000, 8050 and 8100
levels.
Supports: 7900 and 79850
Resistances: 8000 and 8050
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