Talking about further market movements Anuj Singhal, Managing Editor of CNBC-Awaaz Said that the market is close to breaking a very important level. The closing low for December was at 23,587 while the intraday low for December was at 23,537. Gift Nifty is saying that we will open below these. If it slips below this, the way to the lower levels of November will open. November’s closing low was 23,350, intraday low was 23,263. This entire week Nifty gave a strong rejection from 200 DMA. Almost every day the market is falling intraday. Almost every day the market is closing at the day’s lower levels. FIIs volumes increased yesterday but still not normal.
Market: What’s going on?
Anuj Singhal said that the market has increased the risk of equities in the last 3 weeks. Stock market is not just one way. Here the returns are high and the risk is also high. In the last 3-4 years, rallies were held without correction. People forgot that the market can also fall. There have been many reasons for the market’s fall. The biggest reason has been the results? Earnings growth has lagged far behind the Nifty rally. The second major reason has been the huge selling by FIIs and the third major reason has been the overconfidence of retail. Anuj Singhal further said that the movement of dollar-rupee has also spoiled the sentiment for the last 2 weeks. Retail investors are still left.
Nifty: Where and how will the bottom be formed?
Anuj Singhal said that there was a big rally in Nifty after the closing of the election results day. There was a rally of 4,332 points from closing of 21884 to 26216. This rally took place in about 3.5 months. At 23,328 this will be 66% retracement of the entire rally.
He further said that if this decline does not stop here then the path back to 21,884 may open. Short positioning of FIIs is at near record high. The last time a big rally happened was due to similar short positioning, but the market needs a trigger for the rally. Such a macro trigger can now come only from the budget. If there is any big announcement in the budget then there will be big covering. Before that, once again the weather of the results will also be kept an eye on.
strategy on nifty
Anuj Singhal said that the first support of Nifty is at 23,450-23,500 (Option Zone) while the major support is at 23,250-23,350 (Nov’s low). First resistance is at 23,800-23,850 (recent high, 200 DMA). Major resistance is at 23,950-24,100 (Option Zone). Money is being made by selling every rally that fails. Wait for the rally to fail and then go short with a SL of 100 points.
He said that there may be strong short covering during the day today. Do not short after gapdown of 150 points. Also be prepared for intraday short covering. It would be better to stay away from the market for some time.
strategy on bank nifty
Now 200 DMA space is open in Bank Nifty. The current 200 DMA is at 50,600. Bank Nifty’s first support is at 50,600 (200 DMA) while major support is at 49,900-50,000 (November low, 50 WEMA). Bank Nifty went from strongest to weakest in two weeks. Just two weeks ago, Bank Nifty was close to a new peak. Banks were most affected by the selling of FIIs.
Nifty Strategy for Today: 50436 level is very important for Bank Nifty, know to what extent Nifty can fall in the short term.
(Disclaimer: The views expressed on Moneycontrol.com are the personal views of the experts. The website or its management is not responsible for the same. Money Control advises users to seek the advice of certified experts before taking any investment decision.