21 May 2018


The week has started on negative note. The markets ended lower on 21 May 2018, following the resignation of the Bharatiya Janata Party's (BJP's) B S Yeddyurappa in the Karnataka Assembly despite positive global cues. B S Yeddyurappa’s third chief ministerial stint lasted all of 55 hours, and his resignation on Saturday evening came as a shot in the arm for an Opposition struggling to mount a united challenge to the Narendra Modi-led Bharatiya Janata Party (BJP) in the 2019 Lok Sabha elections. Sentiment got another jolt after Moody’s Investors Service downgraded PNB’s rating, citing the impact of recent fraud on its capital as well as weak internal controls. The gauge finally ended at a nearly one-month low of 34616, down 232 points. This is its weakest closing since April 25 when it had finished at 34501. It had lost 708 points in the previous four sessions. The Nifty closed lower by 79 points, at 10516, after hovering between 10621 and 10505.
The Nifty future has slipped below support level 10550 & closed at 10516. Going into Tuesday trade, the market is poised in a tricky situation. We might see modestly positive to flat opening on Tuesday. Shorts are being added to the system given the fact that the support level 10520 remains in close vicinity at 10475, the market may seek to take some respite from the current spate of weakness.  On the other hand, the 10575 and 10625 levels will pose stiff resistance on the upside. Supports will come in at 10470 and 10450 levels. We recommend avoiding shorts and keeping overall exposures moderate while keeping a cautious view on the market.
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Resistance: 10550, 10575, 10600
Support: 10475, 10450, 10425

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