The market
extended decline to fifth straight day as sell-off across sectors intensified.
The market opened lower and extended declines with Sensex declining as much as
274 points and the Nifty dropping to over two month low of 11230. The Sensex
fell 135 points to close at 37848 and the Nifty dropped 60 points to settle at
11271. The markets
are expected to fall 8-10 percent from current levels, we are factoring in
earnings per share of 575-580 for the Nifty in current financial year with a
17.5-21.5 times price-to-earnings. We could see the markets falling below the
lowest estimated P/E if there are uncertainties in the macro, liquidity and the
earnings.
Some more choppiness could be witnessed in the upcoming session. The
recent swing low of 11229 levels could help bears to rule. Now 11300 levels has
become an impotent level for nifty. Only above 11330 levels could help bulls to
comeback in the ground. Traders should
trade with proper strategy in such scenario. It looks prudent for traders to
avoid short-term bets and focus on any breach of larger trend, which may chalk
out the future course of action for the indices. The 11100 level still looks
like a sacrosanct support, a breach of which shall take the Nifty future below
the 11000 level. A decisive close above the 11300 level should usher in a
sustainable uptrend.
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Resistance: 11300, 11400, 11500
Support: 11200, 11150, 11100
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