Market Outlook: Bias remains negative; Nifty seeks support at 11,065

@rex_cano

Mumbai: The markets today exhibited high volatility a day ahead of the monthly derivatives expiry. Mirroring, the positive global cues, the Sensex, opened with a significant positive gap of almost 400 points at 38,125. After consolidating its gains the BSE index slipped into red in noon deals and drifted to a low of 37,313 – down nearly 850 points from the day’s high. However, a swift recovery in late noon deals saw the BSE index recover most of its losses. The Sensex finally ended with a minor loss of 66 points at 37,668.

Among the Sensex 30 stocks, Axis Bank advanced nearly 2 per cent. Hindustan Unilever, Infosys, Titan Industries, HDFC Bank, Maruti Suzuki and Nestle India were also up a per cent each. On the other hand, Bharti Airtel plunged nearly 8 per cent. Tata Steel, IndusInd Bank, NTPC, PowerGrid Corporation, ONGC, TCS, Bajaj Finance, Sun Pharma, SBI, Tech Mahindra, ITC and HCL Technologies declined 1-3 per cent each.

The Sensex continued its southbound journey and has now broken its monthly S1 support as well. As per the monthly Fibonacci chart, the BSE index can now drift towards the monthly S2 and S3 level at 37,080 and 36,710, respectively. On the upside, the index is likely to face resistance around 37,950 and 38,630. The bias for the remainder of the month is likely to remain negative as long as the index sustains below 38,630.

Also Read: Market Outlook: Bias for Nifty to remain bearish below 11,200; Sensex may seek support at 37,450

As per the daily Fibonacci chart, on Thursday, in case of an up move the BSE Sensex is likely to face resistance around 37,980-38,080-38,180. On the other hand, in case of a decline the Sensex may seek support around 37,350-37,250-37,160.

The NSE Nifty from an opening high of 11,260, tumbled to a low of 11,024, and eventually ended with a loss of 0.2 per cent at 11,132. The NSE index has now ended below its lower-end of the Bollinger Band for the second straight day. However, the index seems to be seeking support around 100-WMA (Weekly Moving Average) which is at 11,065.

The bears are likely to have the upper-hand as long as the Nifty remains below the lower-end of the Bollinger Band, which is currently at 11,150. In the coming trading sessions, the short-term trend too may turn negative, as the 20-DMA (Daily Moving Average) and the 50-DMA are seen converging. The 20-DMA is at 11,420 and the 50-DMA is at 11,300. Technically speaking, as and when the 20-DMA slips below the 50-DMA, the short-term trend will turn negative. As per the daily charts a sharp dip towards the 200-DMA at 10,770-odd level for the Nifty cannot be ruled out.

Among the key momentum oscillators on the daily chart, the DI (Directional Index), the Slow Stochastic and the MACD (Moving Average Convergence Divergence) continue to indicate a negative bias. However, the 14-day RSI (Relative Strength Index) is now nearing the oversold zone.

Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.