19 March 2018


"NIFTY FUTURE SELL BELOW 10150 TGT 10090/10050 SL 10200"
Bears have maintained an upperhand for major part of the session in the week starting Monday as sensex & nifty ended at fresh 2018 lows amid weak global cues.  Indian stock markets continue to slide down due to uncertainty around the banking sector and current political situation given the election schedule this year. This has the potential to derail the sentiment & earnings growth for the next year. Investors looked for cues from the two-day Federal Reserve meeting due later in the week. Continued ruckus at both Rajya Sabha and Lok Sabha for 11th consecutive day, political uncertainties and widened current account deficit in the December quarter also weighed on investor sentiment. The Sensex was down 252 points at 32,923. Nifty future closed below the 200-DMA, falling 109 points to 10122. Nifty future has opened at 10230 made a high of 10235 and low of 10102.
The Nifty50 has so far corrected nearly 9 percent from its record high of 11171 touched on January 29 (2018), especially after Union Budget. Global trade war concerns, early Fed rate hikes, imposition of long term capital gains tax, political uncertainties after Telugu Desam Party exited NDA government etc dented market sentiment. This correction was long overdue as the market has been trading at a premium to the average one year forward multiple for quite some time, but the earnings and macros started improving and are expected to improve faster going forward. The year going ahead is expected to be volatile due to many events and reasons - state elections, Fed rate hikes, general elections 2019, trade war, earnings etc. We might now be entering the oversold territory in the short-term, and would not advocate entering fresh longs at this juncture.  Index has broken the swing low of 10150 & has reached the trend line from previous swing lows where it has halted for the day. Breach of the swing low confirms wave extension on the downside with key targets placed at 10050-10000. .  On the other hand, the 10250 and 10300 levels will pose stiff resistance on the upside. We recommend avoiding longs and keeping overall exposures moderate while keeping a cautious view on the market.
RESISTANCE FOR NIFTY: 10250, 10300, 10350
SUPPORT FOR NIFTY:  10100, 10050, 10000

No comments:

Post a Comment