The BSE Sensex lost 12.32 points or 0.07% to settle at 18,197.20, its lowest closing level since 23 June 2011. The Sensex rose 124.75 points at the day's high of 18,334.27 in morning trade, its highest level since Wednesday, 27 July 2011. The index fell 77.66 points at the day's low of 18,131.86 in early trade. The S&P CNX Nifty was down 5.75 points or 0.1% to 5,482, its lowest closing level since 24 June 2011. The Nifty hit low of 5,453.95 in intraday trade. The Nifty hit a high of 5,520.30 in intraday trade, its highest level since Wednesday, 27 July 2011. The BSE Mid-Cap index fell 0.68% and the BSE Small-Cap index declined 0.67%. Both these indices underperformed the Sensex.
The market breadth was weak. On BSE, 1,764 shares fell and 1,122 shares rose and a total of 115 shares remained unchanged. The breadth was positive earlier in the day. From the 30 share Sensex pack, 18 stocks fell and the rest rose.
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VIEWS FROM DIFFERENT BROKING HOUSES:
HDFC SECURITIES: “Although the Sensex/Nifty is in a downtrend, the indecisiveness displayed on Friday does give some hope for the bulls. The main indices traded in a narrow range in a volatile manner as the bulls were not willing to give way to the bears. With immediate upside resistance at 5520, the Nifty would need to cross these levels for the bulls to regain control. Crucial supports to watch in the next week are the immediate Nifty lows of 5454. Given that the markets are in a downtrend, we recommend traders to avoid buying aggressively. Traders should only go long if there is evidence of strong buying emerging that takes the Sensex/Nifty above their immediate resistances of 18334/5520 and also breaks out of the downward sloping trend line. Moreover, given that any upsides could be limited, only stocks that are exhibiting relative strength should be bought. Shorts can be built if the immediate lows of 18131/5453 are broken. Our downside targets in this scenario would be the next supports levels of 18064-17804/5434-5343”.
KOTAK SECURITIES (Srikant Chouhan): “For the coming week, Nifty is expected to remain choppy in the range of 5,350 and 5,600. Traders should look for initiating longs only above 5,530. 5,600 will act as stiff resistance for the market, trading below the level of 5450 can intensify the selling in the market which can lead index to the level of 5,350 with minor resistance at 5,410 level, slippage of 5350 level will be hard landing on the bulls, in that case slippage can extend further to the tune of 5,200. Market reversal stands at 5,530 on closing basis. Decisive close below/above 5,530 will signal potential reversal in trend. Strategy for the week: Traders should look for initiating longs above 5,530 for target of 5,600 with stop at 5,500 on close basis. Option traders can look for initiating put positions around 5,450 levels with stop of 5,500 on closing basis. Power and Infra stocks will remain in focus”.
CANARA BANK SECURITIES (CanMoney): “Technically, Nifty witnessed a weak show and after weakening the momentum in last session, today started the August series of F&O in red. In line with average rollover of indices position, though Nifty witnessed a decline but gradually recovered and closed on flat note. In its recovery movement, Nifty regained its vital support of 5500 but eventually settled at lower levels, this may be a weak point for bulls. On account of weakness, Nifty for the fourth successive day closed below the vital support levels of 9, 14, 50 and 100 day’s SMA placed at 5570, 5571, 5520 & 5581 levels; this may continue to spoil the buying sentiments in forthcoming sessions. Akin to last two sessions, today Bears again dominated the market, because of which, Indices closed with weak market breadth. This may strengthen selling sentiments in coming sessions. In today’s session, VIX closed at a little higher level of 19.77%, indicating more volatility in market in the forthcoming sessions. RSI (14) for the session was at 43.46 levels and MACD remained below the signal line, thus combined together they are giving the signals that; market may be in range bound trade in coming session”.
FAIRWEALTH SECURITIES: “The range for the coming week may be at in between 5410-5650 and if it breaches the level of 5650 the resistance may be 5710 and the crucial resistance will be at 5752 and the support if it breaks the level of 5410 may be at 5348 and the key support for the week will be at 5256. Our view for the market in the coming week is that the movement will be sideways unless or until the market breaks the above mentioned range i.e.5410-5650.As the Nifty is trading with the pattern of symmetrical triangle which is to be called the in-continuation pattern so our advise is to buy at the lower band with the stop loss of below 5348 and can get a price of 5500-5550 during the week”.
BONANZA ONLINE: “After showing selling pressure previous week, Nifty made bearish engulfing candlestick pattern on weekly charts, which shows that bears are having control at the moment. Nifty may trade in 5300-5750 range for next few days and volatility in this range may be seen. For trading during the coming sessions, trend deciding level is 5500. If Nifty shows strength above 5500 levels then we may see rally 5550/5600/5650/5700 levels. If Nifty doesn’t sustain above 5500 levels then profit booking till 5450/5400/5350/5300 may also be seen”.
Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
For Monday | Sell | 5480-5500 | 5450-5435 | 5520 |
For the Week | Sell | 5500-5540 | 5420-5380 | 5570 |
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to positive note on Monday. Trade short in Nifty below 5480 levels else around 5,500 levels, with stoploss at 5,520 for the targets of 5,450-5,430 levels”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Higher-than-anticipated rate hike by the RBI and its strong focus on containing inflation at the cost of growth took the market unawares, leading to a sell-off. The strong hike in interest rates and RBI’s strong stance on containing inflation indicates more rate hikes are to come and perhaps repo rate could peak at 9%. Markets had had a good build up before the monetary policy expecting a pause or a 25bps hike and, therefore, the sell-off were a natural course. The sell-off was compounded by uncertainty in the US as regards meeting the debt commitment (which we believe is something technical in nature), and a weaker Europe dragging equities world over. Some instances of corporate governance issues, nepotism and bribery again came to the fore, which eroded market capitalization of some of the large Corporate. Markets, we believe after the current sell-off, are likely to follow a broad 5400-5600 trading range. Large technical sell-offs of blue-chip companies due to quarterly results disappointments could be used to accumulate from a long term perspective. We continue to be bullish on the consumer and healthcare space and any dip should be used as an opportunity for investors to enter. Technically, market is likely to find support at 5440 & 5400 levels and would face resistance at 5525 & 5600 levels”.
ICICI SECURITIES: “The Nifty could not hold the crucial resistance of 5650 at the start of the week and fell by 2.6% when the sentiments got dampened by the higher-than-expected interest rate hike of 50 bps by the RBI. As it was an expiry week, the fall was also
supported by the rollover of short positions into the August series. Nifty August 5500 and 5600 Call options continued to add open interest suggesting 5550 may remain a stiff resistance on the upsides. However, 5400 Put also added open interest and may act as an immediate support for the market. The Nifty has immediate resistance at 5550 and the higher levels may face selling pressure if this level is not taken out. Bank Nifty has immediate resistance at 11100 and support at 10700. It may remain range bound within this range”.
SMC ONLINE (WISE MONEY): “Overall, Nifty is expected to trade in a range of 5400-5600 levels this week. On the options front, volatility has declined significantly, with the VIX falling to 18.51%, indicating range-bound trades ahead. If the Index slips below the 5450 mark, it could slide to 5300 levels, owing to increased selling pressure. However, the sustenance of 5600 levels is extremely important for the Index to showcase any further rally in the short term. Technically, the Index is consolidating around the cluster of moving averages. The put-call ratio of open interest closed at 1.04. The highest concentration of open interest remained at the 5400-strike put option, which has above 50 lakh shares in open interest. This is closely followed by the 5700-strike call option with open interest of above 55 lakh shares. Options build-up in the 5700 strike indicates stiff resistance in the medium term, while open interest of above 50 lakh shares in the 5400 strike indicates crucial support in the short term. The Implied Volatility (IV) of call options was 17.41% while the average IV of put options was 18.16%”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “The market tried to bounce back as expected and found resistance near our resistance and closed flat for the day. Technically the market is typically in a sideways mode and 5404 is as strong support to work with and 5532 a strong resistance. The support for the Nifty is at 5468-5404 and resistance at 5532. The crucial support on the Sensex on the downside is 18009 and resistance at 18437. On weekly basis, nifty is in sideways mode with an upper range of 5600 and the downside range if 5360 though 5400 is a strong support to deal with. From a trading point of view I would be cautious and be in profit booking mode if I am short as jab down could be a profit booking opportunity”.
ANGEL BROKING (Technical): “The Daily chart of the Indices depicts a "Doji" candlestick formation which indicates indecisiveness prevailing at the current level. We are observing that prices have closed near 50% Fibonacci retracement level of an upside rally from 17314 to 19132/5195 to 5740 levels. Also, on the Weekly chart, the RSI momentum oscillator has convincingly slipped below the 50 mark after nearly 3-4 weeks. RSI sustaining below the 50 level is a sign of weakness. Markets fell from their high of 18945 / 5702 registered in the initial part of the week after the announcement of "RBI Monetary Policy" and breached 18415-18326/5532-5496 level which was acting as a strong support zone since the previous few trading sessions. Going forward, if indices break Friday's high of 18335/5521, then they may bounce back to the levels of 18538-18771/5577-5648. On the downside, 18131/5453 level (Friday's low) may provide a support. The violation of this low may reinforce the negative momentum and, in such a case, indices may test 18000-17800/5400–5345 levels. We advise traders to stay light on their positions and trade with proper stop losses”.
IIFL (Amar Ambani): “The Indian markets came off the day’s highs today after Moody’s said that it had placed Spain’s “AA2” rating on review for a possible downgrade, citing continued funding pressures on the Spanish government. A lot would hinge on the monsoon session of parliament which begins next week. A few very important bills are slated to be presented in parliament. Hopefully, the warring political class will set aside their differences and clear at least some of them”.
MICROSEC SECURITIES: “After making a high of 5702.25 on Tuesday, Nifty has given a correction of almost 4.4% in a time span of just four trading sessions. Now it has a strong support near 5400. If Nifty breaches 5400, the short term trend would become negative and Nifty may go down further and test the level of 5300. However, some leading indicators (like Stochastic & RSI) are giving the oversold signal of Nifty. So a short term pull back rally to 5680 can not be ruled out. Traders are advised to maintain a stop loss at 5400 of the long positions. For the coming week, first support of Nifty lies at 5440 and the resistance is 5550. If Nifty breaks 5440, it may further go down to 5400 and then 5300. However, if Nifty is able to sustain above 5550, the level of 5625-5680 would become the next target”.
INDIRATRADE SECURITIES: “The markets lost significantly during the week and along with both benchmark indices, all major sectoral indices also closed with substantial loss. This week Nifty likely to trade in the range between 5600-5650 in the upper side and 5350-5300 in the lower side”.
EDELWEISS FINANCIAL ADVISORS: “Nifty witnessed a 'fall' of 2.83% and closed the series at 5487.75. AUGUST series is beginning with comparatively Higher OI (in Quantity terms 8.53% and in 'value' terms 1.48% higher OI than the previous series). Jump in INDEX roll-overs through FUTURES are suggestive of Optimistic approach among players about near term trend. Higher rollover in NIFTY (72% vis-à-vis 67%) accompanied by mild 'Premium' of 10.95 pts (on AUGUST FUT) indicates willingness of market players to carry their Long position in the NIFTY to the new Series. OPTION Distribution data is suggestive of strong Support around 5400 levels of Nifty. To conclude, AUGUST series may see emergence of 'value buying' and revival of sentiments”.
HEM SECURITIES: “The market slumped last week as a sharper-than-expected interest rate increase by the Reserve Bank of India (RBI) at a policy review on Tuesday, 26 July 2011, raised concerns that higher interest rates will pinch corporate profit growth. Nervousness in the global markets due to a US debt impasse also weighed on the domestic market. For Monday the markets are expected to be sideways”.
UNICON WEEKLY: “Indian markets traded highly volatile as RBI unexpectedly raised the key rates by 50 bps against the market expectation of 25 bps. Banking and Realty stocks were hammered on the news. With expiry in the week, and global markets in turmoil, domestic investors also preferred to stay away. Mining stocks (Adani Enterprises, JSW Steel, NMDC, Sesagoa ended sharply lower on the news of following unethical practices in the Karnataka Lokayukta report. On the derivatives front, put writing is seen at 5400 and call writing is seen at 5700, suggesting 5400-5700 to be the trading zone for the August series. Last week Nifty shut on a negative note @ 5482 and down by 152 points from the previous week's close. Technically Nifty on weekly chart has formed bearish candle stick pattern, which shows sideways to negative sentiment in coming sessions. Stochastics and the RSI are slightly overbought and sideways signalling that selling pressure at resistance levels are possible short-term. The close below the 50 day moving average (5520) indicates the short term trend could be turning sideways to negative. Stochastics trending lower at mid-range will tend to reinforce a move lower especially if resistance levels are taken out. The market setup is somewhat sideways to negative trend with trading range between 5325-5620. The next area of resistance is around at 5595-5680. So Nifty appears to be sideways to bearish trading on weekly chart having supports at supports at 5380-5325 levels. For short term trading long positions, stop loss of 5450 is advisable. Weekly Nifty has resistance at 5595-5680 and supports at 5380-5325”.
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