Last ray of hope at 11,100
Trading for the last week began with a downside gap and it probably set the mood for the entire week. The mounting concerns over NBFCs started spooking traders’ sentiments which was fuelled by massive sell off in US markets during the midweek. On Tuesday, October 1st, as well as Friday, October 4th, despite early morning lead, our markets succumbed to the selling pressure and eventually went on to slide below the 11,200 mark. On a weekly basis, index shed nearly 3 per cent which was the biggest weekly fall in the last couple of months.
Exactly two weeks ago, everybody was so ecstatic, jubilant after FM’s announcement on slashing the corporate taxes. This triggered colossal two-day rally in our market to take a giant leap. Who would have thought then, we will again have to undergo that similar pain that we have been witnessing since last 12 – 15 months. The Nifty wiped off 50 per cent gains in the last eight trading sessions; whereas the Bank Nifty and Midcap 50 indices have lost more than 70 per cent, which is really annoying.
There were some hopes built for better days for our markets and last couple of weeks have poured complete water on it. Now for Nifty, we are placed at a crucial junction and probably a last ray of hope for bulls. The current position of Nifty converges with multiple key evidences. Firstly as we highlighted the 50 per cent retracement of the recent up move which coincides with the ’20-SMA’ on daily chart and more importantly, the previous breakout zone of 11,200 – 11,100, which now ideally should act as a sheet anchor support for the Nifty. Let see how market behaves around it in the forthcoming week and be hopeful to have some positive development.
As far as levels are concerned, below 11,100 we may see selling getting aggravated and on the flipside, a resumption of uptrend should only happen if Nifty manages to sustain above 11,400. Traders are advised to keep a tab of all the above mentioned levels and should ideally avoid taking undue risks.