The BSE Sensex lost 297.50 points or 1.84% to settle at 15,848.83, its lowest closing level since 5 February 2010. The index fell 380.80 points at the day's low of 15,765.53 in late trade. The Sensex jumped 110.05 points at the day's high of 16,256.38 in morning trade. The S&P CNX Nifty shed 91.80 points or 1.9% to settle at 4,747.80, its lowest closing level since 5 February 2010. The Nifty hit a low of 4,720 in intraday trade. The BSE Mid-Cap index fell 2.25% and the BSE Small-Cap index shed 2.65%. Both these indices underperformed the Sensex.
The market breadth was quite weak. On BSE, 2,226 shares fell and 641 shares rose and a total of 111 shares remained unchanged. Among the 30-share Sensex pack, 27 fell while only three rose.
FIIs were net sellers with the tune of ` 226.25 crore whereas DII were net buyers of ` 392.90 crore on Friday, the 26th August 2011(prov. fig.)
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VIEWS FROM DIFFERENT BROKING HOUSES:
HDFC SECURITIES: “The downtrend continues as the markets have now closed with losses for five consecutive weeks. The crucial supports of 4786 were also easily broken without any resistance from the bulls. We recommend a wait and watch approach towards fresh longs till we see some signs of stability. Immediate downside targets for the Nifty in the coming week are at 4675. Upsides could find immediate resistance at 4965”.
KOTAK SECURITIES (Sanjeev Zarbade): “A much awaited event today is the Fed Chairman, Bernanke’s speech on the US economy. The meeting has been much anticipated as in the previous year Mr. Bernanke had launched the QE2 programme from the same venue. Economic recovery has still remained soft, thereby triggering expectations of another stimulus package in the form of QE3. As far as today’s sell-off is concerned, it is likely that market participants may have decided to reduce their positions ahead of this event. On the domestic front, the Governments entire focus is on the Lokpal bill. Markets are equally concerned over the developing political situation. For the next week, Indian equities would take cues from the outcome of the Fed speech on Friday. The deadlock between Govt. and Team Anna has also kept markets nervous. Any resolution in on the political front could come as a respite for the markets”.
CANARA BANK SECURITIES (CanMoney): “Technically, after a poor show of last session, today Nifty again witnessed heavy selling and its vital supports. This forced indices not only to close on a weak note but also in giving up vital supports. Today’s speedy downward acceleration forced Nifty to close below its vital supports of 4800 & 4750, which may be a discouraging factor for bulls. Today Nifty – near month future turned to trade at little discount w.r.t. spot, which is a point of concern for bulls. Technically, lower highs and higher lows pattern continued in our market and thus confirmed the short term weakness in our market. In accordance to ongoing trend, Nifty closed below the vital support levels of 9, 14, 50 and 100 day’s SMA placed at 4912, 4989, 5370 & 5488 levels; this may continue to spoil the bulls’ sentiments in forthcoming sessions. Selling proclivity in large caps, small cap & mid cap forced Bulls to yield to bears, because of which, Indices closed with weak market breadth. This may support selling sentiments in coming sessions. In today’s session, VIX, the barometer of uncertainty, closed at a higher level of 33.26, indicating more than average volatility in market in the forthcoming sessions. RSI (14) for the session was at 24.64 levels and MACD remained below the signal line, thus combined together they are giving the signals that; market may continue to witness downtrend with occasional upward spikes”.
FAIRWEALTH SECURITIES: “In the coming week Range for the Nifty may be 4666-5015. If Nifty moved above this range 5138 and 5205 would be strong resistance levels. If Nifty sustains or closes below 4666, it may test 4530 and 4472 levels. Major trend of Nifty is still down, any pull back should be considered as an opportunity to exit long positions and take short positions”.
BONANZA ONLINE: “Nifty is trading in downtrend and Bears are having control for consecutive 5 weeks. If Nifty holds 4700 levels then some recovery may be seen in this week else selling pressure may continue. For trading during the coming sessions, trend deciding level is 4700-4750. If Nifty shows strength above 4700 levels then we may see rally 4800/4950/5050 levels. If Nifty doesn’t sustain above 4700 levels then selling pressure till 4600-4550/4450 may also be seen”.
| Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
| For Monday | Buy | 4720-4740 | 4770-4785 | 4700 |
| For the Week | Sell | 4820-4850 | 4700-4650 | 4870 |
BONANZA PORTFOLIO (Shanu Goel): “Nifty has tested the lower support level of 4,720-4,700. The intermediate term trend continues to be bearish. Whether this level will be breeched is still to be seen but the uncertain local as well as global developments continue to cast a shadow on the stock market. FOMC meeting on QE3 is due tonight and its outcome is likely to influence the market trend in short term”.
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to negative note tomorrow. Trade short in Nifty from current levels or else from 4,800 levels, with stoploss placed above 4,830, targeting 4,700-4,680 levels.
GEOJIT BNP PARIBAS FINANCIAL SERVICES (Alex Mathews): “Nifty today came down heavily in the afternoon below the crucial levels of 4,786 and 4,766 due to lack of positive triggers and is looking at next support of 4,660 levels. It is suspected that the investors, who have rolled over their long positions from August series to September series, might have exited the positions due to heavy sell off which has further ignited the selling pressure. Lack of participation from FII and DII also kept the market under nervous. The resistance is there at 4,850 and 4,915 levels and we may see markets moving towards these levels if the Federal Reserve’s decision is favourable to the markets and vice versa”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Markets would be hoping for some announcement on another round of quantitative easing (QE3) from the Fed at the Jackson Hole summit. QE3 carries the risk of higher inflation and pressure on corporate earnings in significant commodity importing emerging markets like India over the medium term. Possible regulatory measures to control commodity inflation could be a significant positive for Indian markets. Markets have entered the value zone and select pockets have become attractive. It is time to start putting in money in companies with quality management, good corporate governance, low debt and high focus on domestic consumption. Technically, market is likely to find support at 4700 & 4630 levels and would face resistance at 4850 & 4965 levels”.
ICICI SECURITIES: “The Nifty is likely to trade volatile due to prevailing pessimism in the street. We expect 4650 mark to act as critical support for index while any higher levels close to 4950-5000 shall be considered as a shorting opportunity. Bank Nifty made a new low and breached 9000 amid heavy selling in heavyweights like SBI. Further short positions were added in index components. Weakness may continue until it surpass above 9200 on higher side. A round of short covering above 9200 can not be ruled out”.
SMC ONLINE (WISE MONEY): “Heavy weight sector like Banking, IT and Metal stocks saw short rollover. However, Cement and Telecom stocks bucked the trend as traders rolled over long positions to the next series on the hopes that these shares will perform better than the market. Rollover in Nifty to September series was around 70% as compared to the pervious series which was 69%. Market wide rollover was also close to 85% largely on the short side as most of the sectors saw negative to low cost of carry. Fresh short positions can be assumed in the sectors like IT and banking stocks if Nifty fails to sustain 4800 levels it could further test 4600 and 4550 levels due to the sharp increase in selling pressure. Technically, the Index continues to trade below all its moving averages, indicating weak sentiment. Volatility increased significantly as the VIX broke past its long-term average of 26.00%, indicating volatile trades ahead with a negative bias. Put option IVs rose to 27% while call IVs are trading at 24.16%. The put-call ratio of open interest closed at 1.36.The highest concentration of open interest remained at the 4600-strike put option, which has above 40 lakh shares in open interest. This is closely followed by the 5000-strike call option with open interest of above 39 lakh shares. Options build-up in the 5000 strike indicates stiff resistance in the medium term, while open interest of above 40 lakh shares in the 4600 strike indicates downward momentum. The Nifty is expected to remain in a range of 5000-4500 levels with downward bias”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “The market unfolded as expected finding stiff resistance near the 4900 regions and cracking and closing in the red. Technically the market is still weak and there is no sign of strength as yet. The next logical technical target in the days to come could be 4529 and if there is more weakness then even a level of 4300 is not ruled out, however 5000 seems to be a stiff resistance to work with. The support for the Nifty is at 4679-4526 and resistance at 4900-4950. From a trading point of view I would all short all rallies and be very cautious in buying”.
ANGEL BROKING (Technical): “In the last week, we witnessed a sluggish movement till Thursday's session but indices failed to hold recent low of 15987/4796 on Friday's session due to immense selling pressure and registered a weekly close below 16000/4800 mark. The strength in the ADX (14) indicator continues to increase and we reiterate our view that a rising ADX on the weekly chart is a negative sign for the markets. However, on the Daily chart, RSI - Smoothened oscillator has entered an extreme oversold territory. This can be construed as markets are due for a minor bounce or consolidation in coming sessions. However, it is extremely difficult to predict from what level this bounce is likely to occur as the primary downtrend is gaining strength. Therefore, we advise traders to avoid creating fresh short positions as a logical risk reward ratio is highly unfavourable at this juncture. In case of a bounce, if indices sustain above 16256/4888 level then are likely to test 16550-16750/4966-5050. Going forward, indices may test 4675-4540 if they breach Friday's low of 16765/4720”.
IIFL (Amar Ambani): “So will things improve from here on or are we headed for lower levels on the key indices? It’s a tough call to make having seen the deep cuts of August. Markets are waiting with bated breadth as to what Bernanke will say at Friday’s Jackson Hole meet. The short-term outlook continues to be murky owing to a multitude of problems - both domestic as well as overseas. Plus, we have to contend with the ongoing political stalemate over the Lokpal Bill. Don’t get trapped in any relief rally as the sentiment remains precarious”.
JRG EQUITY RESEARCH (IndiTrade): “The first and major support for NSE Nifty for the week ahead is seen at 4665, followed by 4575. The first resistance for the index is seen at 4875, followed by the critical resistance of 4965. A close above the second resistance might stretch the upside further up – however a sustained upside is not expected in this market condition. The technical indicators are continuing in the oversold regions, however, the bullish divergence in a number of them is giving signals for a possible recovery in the days ahead. The RSI is trading with a positive divergence, and so is Stochastic Oscillators. However, any confirmation to a possible recovery is not available yet. MACD, even though is continuing the “bear-signal”, the pick up in momentum is a matter of interest for bulls”.
INDIRATRADE SECURITIES: “It was another week of selling pressure and both benchmark indices and all sectoral indices closed in the red. The Nifty touched its 18-month low level and both benchmark indices breached some important psychological levels. This week Nifty likely to trade in the range between 4850-5000 in the upper side and 4600-4500 in the lower side”.
HEM SECURITIES: “Bears are calling the shots on the bourses. A steep setback this month has pulled the market to 1-1/2-year low. For Monday the markets are expected to be down”.
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