Worse is not over yet for our markets: Sameet Chavan

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By Sameet Chavan

Where we are: This has certainly been a good week of trade for our benchmark indices. In fact, the real action was seen in the broader market that offered decent trading opportunities. The only disappointing thing was that the Nifty could not hold on to its position above the 10,500 mark due to strong profitbooking in IT and some of the banking conglomerates in the latter half.

What is in store: There has been a steady move in the Nifty throughout the week and the index has managed to almost reach expected levels of 10400–10500. Considering the recent development in some of the heavyweight counters, a possibility of extending this move towards 10,580-10,640 cannot be ruled out. But now, we will not be as convinced as we were a couple of weeks ago. We would certainly avoid aggressive longs, and in fact, traders should gradually start liquidating long positions. It would certainly be a prudent strategy to stay light with a stock-specific approach. For the coming session, 10,520 followed by 10,580 would be seen as an immediate resistance zone; whereas on the downside, 10,450–10,355 are likely to act as crucial supports.

What could investors do: With a broader view, we would reiterate that if we look at the weekly and monthly charts, we still believe that worse is not over yet for our markets. This is just a relief rally and hence, one need to keep booking timely profits and should stay light on positions.

What could investors do: The Nifty futures may find support around 10,114 and 9,971, and it may find resistance around 10,444 and 10,499 on the upside. It has closed at the lower level of the weekly charts, showing bearishness for the next week. The volumes were more as compared to previous week, showing strength in the down move. If the Nifty goes below 10,205, then immediately on the down side it will find support at 10,114. A close below 10,114 can take the index to 9,971. Hence, selling at higher levels is advisable. We expect a bearish trading session for the next week. Broader trading range for the week: 9971-10499. Immediate probable trading range for the week: 10114-10444. Top picks are Glenmark Pharma, Pidilite Industries, Torrent Pharma and CESC.

(The author is Chief Analyst – Technical & Derivatives, Angel Broking. Views expressed are personal.)

Source: Economic Times