Market Strategy: Talking about further market movements and outlook Anuj Singhal, Managing Editor of CNBC-Awaaz Said that this week has been very painful for the market. Nifty may have fallen 2% but investors have screamed. This week the midcap index fell by about 4% and the smallcap index fell by about 5%. This week was the worst for portfolio investors in this entire period. When the night is darkest, dawn is closest. The selling of FIIs is showing no signs of stopping. It seems that now FIIs are packing their bags and leaving. But the big question is, what changed in midcap and smallcap? The answer is that a rapid rally was seen in the last 3 years. There was a bubble in midcap and smallcap which is now bursting.
Market: What are the signals?
Anuj Singhal said that FIIs made heavy selling in the cash market yesterday. Sold about `7,200 crore in the cash market. This was the biggest selloff by FIIs in cash since November 28. It would have been better if the FIIs had not returned from leave. There was big selling in index and stock futures also. The market is oversold but we have been saying this for 3 months.
The market sentiment is very bad at this time. Bank Nifty has already broken the November low. Nifty is also showing signs of breaking the November low. Now the issue is not whether only the November lows will survive. Now the question is, if the November low is broken, how far will we go?
How far can we go?
Anuj Singhal said that let’s take the starting point of the rally from the closing level of 21,884 on June 4. From there there was a rally of 4,332 points to 26,216. The closing level was 26,216 on September 26 i.e. there was a rally of 4,332 points in 3.5 months. From there we have now fallen 2,690 points.
Fibonacci analysis reached the final retracement of 62.1%. Now if the November low is survived then there is a danger of going back to 21,884. Keep in mind – the last time the market position was this bearish was in June only. There will be a hope that the market will get some trigger for short covering.
strategy on nifty
The first support of Nifty is at 23,400-23,450 (Option Zone) while the major support is at 23,250-23,350 (November low). The first resistance is at 23,650-23,700 (yesterday’s high). The first resistance is at 23,750-23,800 (option zone). There are two types of trades in this market. Big Trade – Sell when every rally fails. Short Trade – Buy for intraday short covering bowl. Increase SL of positional short deals to 23,600.
strategy on nifty bank
Anuj Singhal said that now the path to 48,500 is open in Nifty Bank on the chart. The next major support is at 48,500. There is also a small support of 49,000 in between. Nifty Bank has now become a very weak link. HDFC Bank has lost 3 months of rally in 6 days. Find opportunities to short every rally and make money. There will be no confidence until it closes above Rs 51,000.
Nifty Strategy for Today: Trade cautiously, if it slips below 23,461 then level of 23,258-23,352 is possible.
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