Mumbai: The early morning rally fizzled out as the day progressed – that just sums-up today’s market performance. The BSE benchmark index, the Sensex, surged to a high of 32,302 in the first hour of trade, thereafter it pared gains and slipped into the negative terrain in the last hour of trade.
The Sensex shed 800 points from the day’s high as the index touched a low of 31,501. The weakness was mainly on account of the selling in private banking stocks. The BSE index eventually ended with a minor loss of 81 points at 31,561.
Among the Sensex 30 stocks, ICICI Bank plunged over 5 per cent to Rs. 320 post its Q4 earnings. Kotak Bank, Hindustan Unilever, HDFC, IndusInd Bank, HDFC Bank, Nestle, Sun Pharma and Tech Mahindra declined 1-2 per cent each.
On the positive side, auto shares were in demand today amid reports of kick-starting two-wheeler sales and push for scrappage policy for the industry. Hero MotoCorp, Bajaj Auto and Maruti rallied around 6 per cent each. TCS, HCL Technologies, UltraTech Cement, ONGC, Tata Steel, Infosys, Bharti Airtel, Mahindra & Mahindra and Reliance advanced 1-2 per cent each.
Among sectoral indices, the BSE Auto index zoomed over 4 per cent in trade today. The IT, Telecom and Metal indices were some of the prominent gainers. On the flip side, the Bankex slipped 2.3 per cent.
The market was marginally negative – out of 2,588 stocks traded on the BSE, 1,285 declined and 1,109 advanced. Today, 39 stocks registered a fresh 52-week summit while 102 stocks recorded a new 52-week low.
With the kind of start to the week, it seems that the Sensex seems headed towards new low for the month. As explained earlier, the downside target for the Sensex would be the monthly Fibonacci S2 and S3 levels placed at 30,525 and 29,770, respectively.
As per the daily Fibonacci charts, on Tuesday, the Sensex may seek support around 31,255-31,160-31,065, while in case of an up move the index may face resistance around 31,865-31,960-32,055.
The NSE Nifty is now on the verge of breaking its near support around the 20-DMA (Daily Moving Average), which stands at 9,236. A dip below this level could trigger a sharp slide towards 8,980 – it’s trend line support or further lower to 8,830 – the lower end of the Bollinger Band on the daily chart.
However, on the positive front it seems quite likely that the down move may be short-lived, as the short-term trend is about to turn positive, with the likelihood of 20-DMA crossing over the 50-DMA in the next few trading sessions. Hence, as mentioned in the weekly outlook it seems like the Nifty may move in a broad band of 9,000-9,500 with alternate bouts of volatility on the either side.
Among the key momentum oscillators – the Slow Stochastic and the MACD (Moving Average Convergence Divergence) are somewhat inconclusive, while the 14-day RSI (Relative Strength Index) continues to remain in neutral mode. The ADX (Average Directional Index) is indicating that neither the bulls nor the bears have an upper hand for now, hence markets are likely to remain rangebound.
Disclaimer: The article is for information purpose only and does not advocate any buy or sell /recommendation.
