The 30-share benchmark index, Sensex plunged 771.77 points or 4.56% during the week to 16,162.06. Meanwhile, the broad based Nifty dropped 216.5 points or 4.26% over the week to 4,867.75.
FIIs were net sellers with the tune of ` 1279.61 crore whereas DII were net buyers of ` 765.38 crore on Friday, the 23rd September 2011(prov. fig.)
VIEWS FROM DIFFERENT BROKING HOUSES:
HDFC SECURITIES: “With the Nifty closing well below the short term trend reversal levels of 4911, the short term uptrend that began three weeks back has reversed. We expect further downsides in the coming week and therefore continue with our cautious approach”.
KOTAK SECURITIES (Sanjeev Zarbade): “On the back of negative global cues, the Sensex started in the negative zone. There was significant intraday volatility. However, European markets opened firm, which aided a recovery in the markets from the day’s lower levels. Given the sharp sell-off in the global equities and lack of support from the FIIs, Sensex has declined about 4% for the week. However, this compares favourably versus the Dow, FTSE and Hang Seng each of which have fallen between 7-9% during the same period”.
CANARA BANK SECURITIES (CanMoney): “Technically, after yesterday’s big losses, Nifty witnessed a big fall again and breached some of its vital supports. As market was bereft of buying, Bears were able to gain full control of the market and because of this, Nifty embraced another weak closing. Today’s movement further confirmed the deteriorating strength of buyers and a pattern of lower highs and lower lows was in formation. In today’s session, Nifty breached its vital supports of 4900 and 4960. Nifty closed below the vital supports of 9 & 14 day’s SMA placed at 5023 and 5039. 50 & 100 day’s SMA levels were recorded at 5193 & 5347 levels, i.e. above the Nifty closing; these may be the resistances in forthcoming sessions. Severe selling in Large Caps, Small cap & Mid cap boosted Bears to snatch control from bulls, because of which, Indices closed with deep negative market breadth. In today’s session, VIX, the barometer of uncertainty, closed at a higher level of 35.36, indicating more than average volatility in market in the forthcoming sessions. RSI (14) for the session was at 39.23 levels and MACD closed below the signal line, thus combined together they are giving the signals that market may continue to witness consolidation”.
FAIRWEALTH SECURITIES: “The Nifty has formed a downward bar reversal on the weekly chart thereby indicating that the recovery could have exhausted itself while a close below the 4829 level could mean the possibility of a further downside not ruling out the probability of a minor bounce back on the daily chart. On weekly chart, Nifty has a strong resistance at the neckline shown by black line. It indicates 5205-5225 may be a strong resistance zone for Nifty. On daily chart, Nifty is trading in a channel shown by two black lines. On further fall nifty is expected to get support at the lower line of the channel around 4646‐4636. Also it is trading below 50 and 20 days EMA”.
BONANZA ONLINE: “Nifty made bearish engulfing candlestick pattern on weekly charts, which shows that bears are having control at the moment and lower prices may be seen. However, Nifty Sept. future expiry is due in this week, therefore volatility may be seen. Global indices may play important role in sentiment preparation. Recovery may be seen, if Nifty maintains above 4900 levels, else selling pressure may be continuing. For trading during the coming sessions, trend deciding level is 4850. If Nifty shows strength above 4850 levels then we may see rally 4900/4950/5025/5100 levels. If Nifty doesn’t sustain above 4850 levels then selling pressure till 4800/4725/4650/4550 may also be seen”.
| Duration | Action | Entry Zone (NF) | For Target of | Stop Loss |
| For Monday | Buy | 4840-4860 | 4900 | 4815 |
| For the Week | Sell | 4930-4960 | 4870-4820-4780 | 4980 |
KARVY STOCK: “The market will take cues from the global markets and is expected to open on a flat to negative note the next trading day. Trade short in Nifty at 4,900 levels with a stoploss at 4,920 levels for targets of 4,870-4,850 levels”.
GEOJIT BNP PARIBAS FINANCIAL SERVICES (Alex Mathews): “Going forward the market may get crucial support at 4800, if fails to move back to 4,930 levels, then once again it can test the panic bottom at 4,720 and 4,665. The only hope left during these days is the expiry of September futures and options market, which is slated to be on 29th of this month”.
ADITYA BIRLA MONEY (MONEY WEEKLY): “Global equities and commodities saw a sell-off as concerns about recession in the developed markets intensified over the Fed’s weak outlook for the US and with the European sovereign debt crisis seeming increasingly intractable. The US markets were down ~7% for the week. Our markets also bore the brunt of risk aversion, declining ~4.5%. Many market experts expressed concerns of a global commodity bubble due to the excess global leverage and liquidity in the system. Crude oil fell 10.6%, copper was down 11.7% and silver declined 18.1%. Gold also declined, down 5.9%. As global investors pulled out money from risky assets like global equities and commodities to park it in safe havens like the US treasury bonds, the dollar continued to strengthen. The rupee was down 4.3% for the week. Sector-wise, the metals index was down 6% on expectations of falling commodity prices and the capital goods index fell 7.3%. Going forward, markets are likely to continue to follow global cues. Commodities are likely to see more pain which might also bring down equities initially with the attendant risk aversion and stresses in the financial system. However, investors would gradually see opportunity as lower global commodity prices would lower inflation, leading to easing of domestic interest rates and higher corporate earnings. Our investment strategy is to continue to accumulate companies with quality management, good corporate governance, low debt and high focus on domestic consumption. Technically, market is likely to find support at 4819 & 4720 levels and would face resistance at 4940 & 4998 levels”.
ICICI SECURITIES: “Due to settlement week and an uncertain global environment, the Nifty may remain volatile. However, we expect it to face a round of short covering if it is able to sustain above 4920 levels. Below 4800 levels a panic settlement could be on the cards. On the higher side, we expect 5040 to act as immediate resistance. The banking index may continue to feel the pressure if it fails to surpass 9600. On downsides, previous lows of 8900 should extend the important support for the banking index. Continuous addition of short positions in private banking stocks may continue to act as a dampener for the segment”.
SMC ONLINE (WISE MONEY): “Indian markets remained extremely volatile and saw wild swings last week. Week started on a positive note before declining towards the support zone of 4800 levels. Nifty found support around the 4800 mark to bounce back sharply on Friday. If the Index slips below the 4800 mark, it could further test 4700 levels due to a sharp increase in selling pressure. The put-call ratio of open interest shed during the week, closing at 1.34, and indicating short-term caution. The highest concentration of open interest continued to be at the 4800-strike put-option with open interest rising above 85 lakh shares for the September series. This is closely followed by the 4700 put-option strikes, which have above 75 lakh shares in open interest, respectively. Among call options, the highest open interest is at the 5000 strike of above 61 lakh shares, followed by the 5100-strike call with open interest of above 60 lakh shares. The implied volatility of call options is at 31.51%, whereas for puts, it closed at 33.46% for the week. The Nifty is expected to remain in a range of 4700-5100 levels. The 4950 level should sustain in the near term and is extremely crucial for any recovery towards 5100 levels. However, in our view, currently, the Index may continue to face stiff resistance around 5000-5050 levels and breach of the 4800 level will intensify selling pressure”.
PINC RESEARCH: “The action in the last two days of the week clearly exemplifies this confident view. In the short term, the breach below 4900 has clearly put the bears in the drivers seat. The downmove concocted with an intense momentum only points to more severe pain for the market in the days ahead. Bearish sentiment should prevail over the next few weeks which can result in Nifty slipping its way till 4700 or lower. Another support on the downside should emerge at the level of 4500. The technical indicators confirm such a bearish hypothesis as well. We had been stating a bearish bias in the medium term due to the following reasons a) The Nifty is trading below an important medium term moving average. b) It is confirmed by medium term indicator which is also confirming this bearish possibility. Due to these two reasons, Nifty remains in the grip of a bear trend. Any continuation of this weak sentiment can result in Nifty slipping towards the level of 4700 followed by 4500. Hence, we retain our bearish view for Nifty in the medium term”.
GABA & GABA FINANCIAL ADVISORS PVT LTD (Prakash Gaba): “The market closed weak in the red with hardly any short covering. Technically the market is still down and we now head into an F&O expiry week. We could see volatility due to roll over but structurally the market is weak and can test the recent low 4720 levels and on the upper side 5000 is a stiff resistance to deal with. The support for the Nifty is at 4840-4804-4751 and resistance at 5000”.
ANGEL BROKING (Technical): “Looking at the Weekly chart, it can be concluded that indices have failed to cross the major resistance zone due to a combination of the "Horizontal Line" resistance and the "Spinning Top" formation. Consequently, indices drifted lower due to immense selling pressure near their resistance zone which ultimately resulted in the breakdown of a "Symmetrical Triangle" pattern. This pattern indicates that indices are likely to head towards the recent bottom of 15765/4720 level. Selling pressure is likely to intensify on violation of this important point; and if indices manage to sustain below 15765/4720, then they are likely to drift towards the next support levels of 15650-15330/4675-4540. While the view is clearly negative considering the Weekly charts, the Daily candle suggests the probability of a temporary pullback rally towards 16490-16620/4960-5000 only if indices manage to cross and sustain above Friday's high of 16368/4930 level. Traders are suggested to trade with strict stop losses as volatility is expected to increase in the coming week due to expiry of derivative contracts”.
IIFL (Amar Ambani): “We are in a really tough global situation with the US and Europe at the centre of the turbulence. It may take a while before the external conditions improve considerably. Emerging markets like India and China are better placed but cannot remain insulated from the overseas mess. So, be prepared for the worst case scenario, especially in Europe, and don’t try and be adventurous. Although investing in equities at this juncture is not prudent given the risks involved, medium to long-term investors could start looking at picking high-quality stocks”.
MICROSEC SECURITIES: “Nifty has broken its short term crucial support of 4900 on Friday. So we expect the downward movement of Nifty would be continuing for another few days and it may take support in the band of 4650-4700. However, Nifty made a gap between 5109 and 5059 on last Thursday. So some short term pull back rally to 5109 can not be ruled out in the extreme short term. For the coming week, first support of Nifty lies at 4800 and the resistance is 4960. If Nifty breaks 4800, it may further go down to 4720 and then 4650. However, if Nifty is able to sustain above 4960, the level of 5020-5110 would become the next target”.
JRG EQUITY RESEARCH (IndiTrade): “After some days of Bull-command, the market fell back to the clutches of Bears. Technically viewing, the current downside in the benchmark NSE Nifty emerged exactly from the 50-Exponential Moving Average, which is a major technical point. Even though Nifty has formed a “doji” in the last day's trading, as per the candlestick patterns (almost same opening and closing, which indicates a 'possible' trend reversal), it is not expected to make any remarkable move in the market. Reading this along with the structure of the technical indicators, the possibility for further downside is not ruled out. The Stochastic oscillator is in the selling mode and the MACD is moving towards a bearish crossing, that too with deteriorating momentum. RSI is trading below the 50-point mark, indicating the upper hand of bears. The Stochastic oscillator is in the selling mode and the MACD is moving towards a bearish crossing, that too with deteriorating momentum. RSI is trading below the 50-point mark, indicating the upper hand of bears. The Stochastic oscillator is in the selling mode and the MACD is moving towards a bearish crossing, that too with deteriorating momentum. RSI is trading below the 50-point mark, indicating the upper hand of bears”.
SWASTIKA INVESTMART: “Next Week the market could be choppy because of the expiry of the near month futures & options (F&O) contracts on September 29 and on Flip side market will be dominated by news coming out of Europe, especially any new information about a possible Greek default and Fear of double dip recession in US. On weekly charts, we can observe that RSI is moving southbound (having a value of 35.90) and Nifty is taking support at the 200-day moving average line. For the coming week, 4760 is the immediate support for the week. If the index slips below these levels then the selling pressure will cause Nifty to get support near 4660/4580 levels. On higher side it will face resistance at 4960 levels on any bounce back. Strength can be seen if it decisively maintains above these levels. Further gains are likely to face resistance towards 5070/5170 levels. Traders are advised to trade cautiously with strict stop-loss as F&O contracts for the current month will expire, so volatility will be high”.
UNICON WEEKLY: “The overall environment remains volatile. Commodities will clearly remain under pressure. With flows turning negative, pressure will be on sectors with larger FII holding from a short term perspective. With commodities, currency all coming under pressure, the markets are entering near panic mode internationally as well as locally. We should see some solutions coming through by October end but till clarity emerges, situation will be volatile. Value investors can look to invest in PSU banks, infrastructure, and auto from a long term perspective. 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 selling pressure at resistance levels are possible short-term. Nifty closed above the 50 day moving average (5194) indicates the short term trend could be turning sideways to negative. Stochastics trending lower at midrange will tend to reinforce a move higher especially if resistance levels are taken out. The market setup is somewhat sideways trend with trading range between 4700-5100. The next area of resistance is around at 4960-5110. So Nifty appears to be sideways trading on weekly chart having supports at 4710-4670 levels. For short term trading long positions, stop loss of 4825 is advisable. Weekly Nifty has resistance at 4960-5110 and supports at 4710-4670. Weekly Sensex has resistance at 16540-16995 and supports at 15700-15550. Weekly Bank Nifty has resistance at 9600-9800 and supports at 9050-8850”.
SMC Global (Saurabh Jain): “Volatility is expected to rule in the market on account of both global factor and expiry of derivative contracts for the month of September next week”. (source: myiris)
SUSHIL FINANCE (Kartik Mehta): “Jittery should continue till stability comes in fiscal health of both Eurozone and US. However internal problems like high inflation and high interest rates should get eased off with falling global commodity prices and better monsoon. Also Government, after getting free from scams, would act seriously ahead of elections. Due to FII selling, sell off in Indian equities has lead to strong demand of dollar. Also USD has become strong globally due to liquidity tightening amidst announcement coming from FED of no more printing of dollar for supporting economy (QE). These things have attributed to INR depreciation against USD”. (source: myiris)
WELLINDIA: “Any fall from here would be driven by investor sentiments which can be utilized as buying opportunity. We expect that the previous low of 4,750 in the Nifty would act as a major support level. Whereas 15,750 would be crucial support level for the Sensex, even in worst of the circumstances, we expect Sensex to hold 15,000 level and 4,400 in case of Nifty. Any investor with investment horizon of more than one year can enter the markets at the current levels. Markets can give around 50% returns by the end of the calendar year 2012. Banking, Infrastructure, Telecom and Power sector would be our top picks”. (source: myiris)
MAGNUM RESEARCH: “We feel that the Nifty would get capped closer to 5,100-5,150 levels on the upside. It doesn’t show a great upside around 5,100 levels in the medium-term. The possible low for the market would be as 4,800 levels, which discounts a lot of the disturbances and uncertainties. But, it doesn’t discount some the international banks going out of the business or some of the countries defaulting. The uncertainty will get capped between or bottoms at the same levels. Over the last weekend, the Nifty has been in the range of 4,900 and 5,150 levels. We have been playing close to those 250 points”. (source: moneycontrol)
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