Nifty 50 and Sensex fell sharply final week breaking beneath a vital long-term assist. We had anticipated this assist to carry and the indices to bounce again. That view has gone unsuitable. We’d now want to remain out of the market, and see if the indices are getting a robust follow-through promoting from right here. Each the Nifty and Sensex are down for the third consecutive week now. They’ve declined about 6 per cent every during the last three weeks.
The Nifty Financial institution index, then again, can be coming down however at a slower tempo. The index has declined solely 3.6 per cent during the last three weeks.
All of the sectoral indices led to pink final week. The BSE IT index was crushed down probably the most. It was down 7.76 per cent.
Extra promoting
The Overseas Portfolio Traders (FPIs) proceed their promoting spree. They bought about $1.25 billion within the fairness phase final week. February has seen a internet outflow of about $3.98 billion. There was a whopping $13 billion outflow within the first two months of this yr. Until the FPIs begin to purchase Indian equities, the autumn in unlikely to halt.
Video Credit score: Businessline
Nifty 50 (22,124.70)
After staying secure above 22,500 nearly all by way of the week, Nifty broke this assist and fell nearly 2 per cent on Friday. It touched a low of twenty-two,104.85 and closed the week at 22,124.70, down 2.94 per cent.
Brief-term view: The break and shut beneath 22,350 maintain the outlook weak. Subsequent assist for the Nifty is at 21,700 which could be examined this week. If the index manages to bounce again from this assist a restoration to 22,000 could be seen first. A break above 22,000 can then give some reduction and take the Nifty as much as 22,600-22,650.
Alternatively, if Nifty declines beneath 21,700, the autumn can prolong to 21,500 and even 21,100.
Medium-term view: The view of seeing a bounce from 22,350 appears to have gone unsuitable. The area between 21,700 and 21,500 is the subsequent essential assist. Nifty has to carry above this assist zone to maintain the possibilities nonetheless alive for a contemporary rally. A break beneath 21,500 after which a fall beneath 21,100 will enhance the hazard of seeing steeper fall to 19,600.
Such a fall will negate our view of seeing an increase to twenty-eight,000-28,500 this yr.
Nifty Financial institution (48,344.70)
Nifty Financial institution fell final week, however at a slower tempo. The index made a low of 48,078.70 and closed the week at 48,344.70, down 1.3 per cent. It’s not wanting as weak because the Nifty 50
Brief-term view: Assist for the Nifty Financial institution index is at 47,800 and 47,600. This may be examined this week. A bounce from 47,800 or 47,600 can take the index as much as 49,500-50,000 within the brief time period.
However, if the Nifty Financial institution index declines beneath 47,600, it may well come below extra promoting stress. In that case, a fall to 47,000 or 46,600 could be seen within the brief time period.
Medium-term view: As we’ve been mentioning for a while, 46,600 is a robust assist which may restrict the draw back. A powerful bounce from round 46,600 can take the Nifty Financial institution index as much as 49,000-50,000 initially. An eventual break above 50,000 will then clear the way in which for a rally to 53,000-54,000 and better going ahead.
The index will come below extra stress if it declines beneath 46,600. If that occurs, a fall to 44,500-44,000 could be seen.
Sensex (73,198.10)
Sensex fell sharply beneath the psychological 75,000 mark final week. The index tumbled to a low 73,141.27 earlier than closing the week at 73,198.10, down 2.81 per cent.
Brief-term view: A direct assist is at 72,900. A bounce from this assist can take the Sensex as much as 74,500-75,000 once more. That can give some reduction for the index.
Alternatively, if Sensex declines beneath 72,900, we may even see a fall to 71,800, and even decrease within the coming weeks.
From a short-term perspective, 77,000-77,500 is a robust resistance zone. Sensex has to rise above 77,500 with a view to deliver again the bullish sentiment.
Medium-term view: The area between 71,000 and 70,700 is the subsequent essential assist for the Sensex. So long as the index stays beneath 75,000 a fall to 71,000-70,700 can’t be dominated out within the coming weeks.
We are able to count on the autumn to halt within the 71,000-70,700 area. A powerful bounce from there can take the Sensex as much as 75,000-76,000 once more within the coming months. Such an increase will nonetheless maintain alive our broader bullish view of seeing an increase again to 80,000 and better ranges this yr.
In case the index declines beneath 70,700, then it may well come below extra promoting stress. In such a situation, there’s a hazard of seeing a fall to 66,000 going ahead. That in flip will fully negate our view of seeing 90,000 on the upside this yr.
Dow Jones (43,840.92)
The Dow Jones Industrial Common remained decrease beneath 44,000 all by way of the week. Broadly, the index was caught between 43,000 and 44,000. Inside this vary, the index witnessed a robust surge from across the decrease finish in direction of the higher finish. The Dow Jones has closed the week at 43,840.92, up 0.95 per cent.
Outlook: The speedy outlook is unclear. The 43,000-44,000 vary can proceed to stay intact. So long as the index stays beneath 44,000, the bias will stay detrimental to interrupt beneath 43,000. Such a break can drag the Dow Jones right down to 42,000-41,800 within the coming weeks.
There are sequence of resistances within the 44,000-44,500 area. So, ideally the Dow Jones must breach 44,500 decisively with a view to flip the outlook bullish. However such rise appears much less doubtless. So, the choice can be to see the Dow Jones stay beneath 44,000-44,500 and fall to 42,000-41,800 within the coming weeks.
Essential helps
