The BSE Sensex tumbled 328.12 points or 1.99% to settle at 16,141.67, its lowest closing level since 25 May 2010. The Sensex lost 482.02 points at the day's low of 15,987.77 in mid-afternoon trade. The index fell 182.07 points at the day's high of 16,287.72 in morning trade. The S&P CNX Nifty fell 98.50 points or 1.99% to settle at 4,845.65, its lowest closing level since 25 May 2010. The Nifty hit a low of 4,796.10 in intraday trade. The BSE Mid-Cap index declined 1.36%, outperforming the Sensex. The BSE Small-Cap index fell 2.01%, underperforming the Sensex.
The market breadth was weak. On BSE, 2,083 shares fell and 773 shares rose and a total of 105 shares remained unchanged.
The market breadth was weak. On BSE, 2,083 shares fell and 773 shares rose and a total of 105 shares remained unchanged.
FIIs were net sellers with the tune of ` 902.61 crore whereas DII were net buyers of ` 423.25 crore on Thursday, the 18th August 2011(prov. fig.)
FIIs were net sellers with the tune of ` 2060.08 crore in the last week whereas DIIs are the net buyers of ` 1174.76 crore.
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VIEWS FROM DIFFERENT BROKING HOUSES:
KOTAK SECURITIES (Sanjeev Zarbade): “For the next week, focus would be on the global markets. The Federal Reserve meets at Jackson Hole and the outcome may give some clarity on how does it plan to stimulate the US economy. Closer home, there is uncertainty on the passage of various reforms, despite the fact that, the Government has lined up a few of them for the monsoon session. Consequently, market expectations are low regarding passage of key reforms in the immediate term. The markets are grappling with several issues (domestic and global). However, investors must consider that even as the momentum is negative and volatility is high, valuations are turning reasonable for long-term investing”.
CANARA BANK SECURITIES (CanMoney): “Technically, today on second consecutive day market witnessed volatile and a big bear candle. Right from morning bears dominated and beaten the bulls whenever they try to pull the index and the recovery was a short while only. Today Nifty closed negative after yesterday’s negative closing, however in today’s fall the technical support level of 4920 and 4850 was broken and closed below these levels. Nifty for the fifteenth successive session closed below the vital support levels of 9, 14, 50 and 100 day’s SMA placed at 5049, 5169, 5430 & 5535 levels; for any positive movement Nifty has to break and sustain above these levels. Along with mainline indices weakness was observed in small cap & mid cap stocks too. Indices closed with deep negative market breadth. This may support selling sentiments in coming sessions too. In today’s session, VIX, the barometer of uncertainty, closed after correcting to 29.19 indicating more than average volatility in market in the forthcoming sessions. RSI (14) for the session was at 22.33 levels and MACD remained below the signal line, thus combined together they are giving the signals that; market may witness some range bound movement with negative bias in coming days”.
FAIRWEALTH SECURITIES: “As we had confirmed in the last week that the Nifty has entered into the FLAT (EXTERNAL) as and when it closes below 5252 on the weekly with the declaration of deep correction of the C-Wave now has been started so the results are coming in. And we had given the range of 5070-5252 and the support level of 4950 and 4782 for the week. The Nifty touched the level of 4796 which was near to the level of key support i.e. 4782 and settled at 4846. Now the Nifty is making lower low and lower high on the daily chart confirming the major trend which is down as well the intermediate trend is also down. The range for the Nifty may be in between 4782-5072 and the resistance may be at 5148 and the crucial resistance will be at 5200 if the Nifty breach the level of 5072 on the upper side. The support for the Nifty may be at 4690 if it breaks the level of 4782 and the key support for the Nifty will be at 4530-4540 for the week. Our view for this week is bearish and one should take an advantage to liquidate the long position at every rise if there is any pull back”.
BONANZA ONLINE: “After making long legged Doji candlestick on weekly charts, Nifty made long black candlestick pattern, which shows that bears are having control at the moment. Nifty August future expiry due in this week so volatility may be seen. IF Nifty continues to hold 4800 levels then some recovery may be seen else selling pressure may be continuing. For trading during the coming sessions, trend deciding level is 4800-4850. If Nifty shows strength above 4850 levels then we may see rally 4950/5040/5100/5150 levels. If Nifty doesn’t sustain above 4800 levels then selling pressure till 4700/4650/4550 may also be seen”.
Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
For Monday | Buy | 4780-4810 | 4860-4880 | 5760 |
For the Week | Buy | 4700-4740 | 4820-4880 | 4660 |
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to negative note tomorrow. Trade long from 4,800-4,820 levels, with stop loss below 4,790, targeting 4,850-4,880 levels. Alternatively, trade short from 4,880-4,900 levels, with stoploss placed at 4,920”.
GEOJIT BNP PARIBAS FINANCIAL SERVICES (Alex Mathews): “Nifty fortunately closed well above the day low. Technically the stock is oversold in its daily and weekly charts while monthly charts are showing some more downtrend. Next we are going to see the August F&O expiry which will give some support to our markets. However 4,800-4,786 remains a crucial level of Nifty”.
GEOJIT BNP PARIBAS FINANCIAL SERVICES: “Nifty fortunately closed well above the day low. Technically the stock is oversold in its daily and weekly charts while monthly charts are showing some more downtrend. Next we are going to see the August F&O expiry which will give some support to our markets. However 4800-4786 remains a crucial level of Nifty”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Risk aversion in the equity markets intensified during the week and bond yields in most of the large quality treasuries showed new lows. US benchmark 10yr yield slipped below 2%. Our markets too were in the line of fire, with technology stocks, companies with high international exposure and high debt, leading the fall. Markets have entered the value zone; cheap has become cheaper but we’re yet to enter the distress zone. We are not sure about the market doing that, but one must always keep something to hit in this zone as well. The sovereign downgrades and the European turmoil is leading to sudden appreciation of currencies and creating cross currency risk in the system. FII has sold $1.7bn for the month. DII has intervened to offset this outflow but not enough to contain the carnage that happened during the week. Initially money is seen moving to strong treasuries like the US, UK, German, Swiss, Australia & Canada. Once risk aversion subsides, global savings would track markets with balanced growth. A QE3 could also bring some risk appetite back into the table. Given the risk higher commodity prices pose to global economic growth, Governments might intervene to reduce financial speculation in commodities through higher margin requirements. India with the help of fall in commodities could emerge as one of the top investment destinations. Our investment strategy would be accumulating companies with high quality management (good track record of delivery and corporate governance), low debt and high focus on domestic consumption. Technically, market is likely to find support at 4786 & 4675 levels and would face resistance at 4932 & 5015 levels”.
ICICI SECURITIES: “The Nifty is likely to trade volatile in accordance with global cues and may remain bearish till it remains below 4950 on the higher side. The immediate support for the index is at 4780 below which 4700 can be tested. The Bank Nifty closed below 10000 this week breaching the lows of February 2010. The short build-up in index heavyweights remained robust, which may drag further if the index fails to recover from these levels. The immediate strong support for the index lies at 9300 while it may face resistance around 9800”.
SMC ONLINE (WISE MONEY): “Indian market ended the week with another 5 % weekly loss. Nifty breached the important level of 5000 and ended at low of week near 4850 level. Here on the next support level in Nifty to watch is 4750 and on upside 5000 will act as strong resistance. Among call options, fresh call writing was observed in 5000, 5100 and 5200 strikes calls, supported by open interest addition. 5000 and 5100 strike call has open interest of above 45 lakh shares, making it a resistance in the short term. On the put side, maximum option concentration is at 4800 level having open interest of more than 56 lakh shares. IV has shoot-up due to uncertainty in world markets. The Implied Volatility (IV) of ATM call options closed higher at 28.46% while the ATM IV of put options ended at 29.90%.VIX still trading in the higher range after breakout indicates higher volatility. The put-call ratio of open interest decreased from 1.08 to 0.86 last week indicating more call writing in higher strikes .The range of 4700-5000 will remain crucial in the next week”.
PINC RESEARCH: “The level of 4800-4900 is the 38.2% retracement of the entire up-move of the Nifty from the lows of October, 2008/ March, 2009 to November, 2010. This zone also confluences with the previous bottom of around 4800 which the Nifty had created in May, 2010. This level of 4800 was a bottom that we had accurately predicted then. Considering the importance of this level, a tussle could transpire around the 4800 level in the next few days. Any pull back, if it happens, could provide interesting insights to the path of the Nifty in the near future. On the other hand, failure to defend this support level could result in further declines towards 4500 or lower. The closing on Friday has occurred above the cusp of an important level of 4800. The level of 4800 is a multiple area of support in the medium term. How the Nifty behaves from the level of 4800 remains to be seen. The next few days move should assist in charting out the short term trend of the market. The oscillator, which is in the neutral zone, could cue itself accordingly depending on the outcome in the next few days. Its a good time to wait and watch for interesting possibilities that lies ahead”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “The weakness continued and the Sensex saw the low right on a support like a dot at 15987. Technically the downside target is achieved and I would not be surprised with a short covering bounce, but technically no sign of strength as yet. The support for the Nifty is at 4778-4682 and resistance at 5020. The crucial support on the Sensex on the downside is 15986-15762 and resistance at 16670”.
ANGEL BROKING (Technical): “Our benchmark indices tumbled from a high of 17036/5132 during the week and Nifty closed well below the psychological level of 5000. As expected, markets fell down to test lower level of 16000/4800 on Friday's session. The ADX (14) indicator continues to move up with the rising - DI (Negative Directional Index) which indicates strength in the negative trend in coming weeks. On the other hand, we are witnessing a candlestick pattern which resembles a "Bullish Hammer" coupled with oversold condition of momentum oscillators indicate a possibility of minor bounce back in coming sessions if indices manage to trade above the Friday's high 16288/4894. In this case, indices may test 16450-16750/4950-5050 levels. The said pattern will be negated if indices break low of the candle. This possible upside rally can only be construed as a bounce back of the fall which can be used as exit opportunity for the traders. Also, due to Derivative expiry, the coming week is likely to trade with extreme volatility. On the downside, a violation of Friday's low of 15987/4796 can take indices to lower levels of 15650-15330/4675-4540”.
IIFL (Amar Ambani): “As anticipated, the Indian market mirrored the steep fall seen across global markets with the BSE Sensex sinking by over 300 points and the NSE Nifty sinking below the 4850 mark. The sentiment for world equities and commodities weakened amid relentless concerns about slowing economic growth and fiscal stress in the western world (read USA and Europe). A downgrade of global economic growth by Morgan Stanley also seems to have spooked global markets. The Wall Street firm has warned that the US and Eurozone are close to a recession. It was also disappointed by policy action in the US and Europe amid worries about the worsening fiscal situation there. For India too, the list of problems has swelled amid no sign of relief on the inflation front and the RBI persisting with its aggressive policy stance. An average monsoon, moderation in the economy, slowdown in key overseas markets and dismal progress in disinvestment has also increased the risk of higher-than-forecast fiscal deficit”.
PRABHUDAS LILADHER (Hitesh Sheth): “At 6,300 everyone was talking about 7,000 levels and right now at 4,800 every one talks about 4,000. There is no element of surprise as at the end of every peak and bottom we see such mindset of market players. During such time we tend to take help of Technical analysis and look at indicators and calculate Fibonacci ratios. All these indicate that a major bottom is round the corner. Indicators are at highly over sold zone. Fibonacci calculations indicate a major support at 4,750-4,800 levels. There may be some accesses but anyone buying at this level for 6 months to 12 months will certainly make a decent gain. We suggest following stocks for investment: - Tata Steel, Tata motors, Infosys, TCS, Wipro, Ranbaxy and Sun pharma. If anyone wants to take a safer bet and avoid individual stocks, I strongly suggest buying Nifty basket in the form of ETF units. It will distribute the risk factor to 50 stocks and will adjust your portfolio by reducing underperformers and increasing out performers”.
JRG EQUITY RESEARCH (IndiTrade): “The technical indicators are continuing under the oversold territory. Being at around the first target, the chances of slight recovery is not ruled out at this point of time. The critical range for the NSE Nifty is expected to be 4895-4770. A breach of either of the range on a closing basis can possibly direct the momentum towards that direction. The first Resistance for the week ahead is expected to be 5010, followed by 5115. On downside, the Support below the lower band of the critical range is seen at 4670”.
INDIRATRADE SECURITIES: “It was a turbulent week for the markets with both benchmark indices and all sectoral indices closing with significant losses. The Nifty closed below its psychologically important level of 5000 and RIL lost its number one position in terms of market capitalization. The Sensex was down 4.5% and the Nifty also lost 4.5% during the week. This week Nifty likely to trade in the range between 5000-5200 in the upper side and 4700-4500 in the lower side”.
SWASTIKA INVESTMART: “Next Week the market could be choppy because of the expiry of the near month futures & options (F&O) contracts on August 25. Shares of NBFC’s may edge higher on reports the RBI is shortly expected to release its draft guidelines for new private sector bank licenses to seek public comments”.
HEM SECURITIES: “Key benchmark indices fell in 3 out of 4 trading sessions in truncated week to hit 14 and 1/2-month lows weighed by sustained selling by foreign investors. Investors investing in India are worried that higher interest rates will restrict corporate profit growth. Commercial banks have raised lending rates over the past few days after the Reserve Bank of India (RBI) late last month raised its key lending rate by a steeper-than-expected 50 basis points at a policy review. For Monday the markets are expected to be down”.
INVENTURE GROWTH & SECURITIES: “There is no clarity on European crises as well as US Debt issues and also back home there is a major political mess going around. These factors are directly affecting Global markets where it’s more of uncertainty that’s creating panic across the globe. Investors are still thinking ‘How long should I hold my stocks’. Major supports in the market from the current levels are placed at 4,770-4,720 levels. Immediate resistance comes around 5,120 levels”.
UNICON WEEKLY: “The environment remains volatile and fluid given the happenings in global markets. Growth downgrades have already started. Reduction in earning estimates by analysts is also likely and the market is trying to price in all these concerns. The worst affected in the short term are companies with high leverage and those companies which depend on developed economies for business. There is value emerging in the market at current levels. However from a short term perspective, it is still advisable to maintain a cautious view give as the situation remains fluid and stock prices will remains vulnerable especially for sectors like banking, infra. Defensives like FMCG and Pharma would be the last to fall. Correction in crude could bring some buying interest into oil marketing companies as well. 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 oversold and sideways signalling that buying pressure at support levels are possible short-term. The close below the 20 day moving average (5288) indicates the short term trend could be turning sideways to negative. Stochastics trending lower at midrange 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 4650-5000. The next area of resistance is around at 5000-5150. So Nifty appears to be sideways to bearish trading on weekly chart having supports at 4650-4550 levels. For short term trading long positions, stop loss of 4770 is advisable. Weekly Nifty has resistance at 5000-5150 and supports at 4776-4650. Weekly Sensex has resistance at 16725-17190 and supports at 15600-15125. Weekly Bank Nifty has resistance at 9700-9860 and supports at 9050-8810”.
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