Indian shares ended higher today, posting losses for six consecutive sessions, but the broader markets continued to decline. The NSE Nifty 50 index closed 0.37% higher at 15,350.15, while the S&P BSE Sensex closed 0.46% higher at 51,597, as gains in consumer and bank stocks helped counter the sharp fall in metals. Both indices fell more than 5% last week in their biggest weekly drop in two years.
The fall in crude oil prices has given some positive signals to markets like India and has resulted in decline in bond yields. Oil was on sharp losses on Friday as traders weighed whether aggressive US monetary policy would lead to a slowdown that would hit consumption. Brent was trading near $114 a barrel after falling more than 5% on Friday. On the other hand, broader indices, midcaps and smallcaps remained under pressure and closed lower in the range of 1.4-3%.
“It seems Nifty has stabilized on the day US markets are closed. After forming a double bottom at 15183-15191, Nifty may move towards 15670 if there is no new downside development on the horizon,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
Ajit Mishra, VP – Research, Religare Broking Ltd suggests investors be cautious, pointing to a downside in the broader markets.
“We feel this is just a break after a sharp decline and participants should look for shorting opportunities if Nifty rebounds towards 15,550-15,700 zone. For cues, the performance of global indices and movement of crude oil will be followed.”
The Nifty Metal index ended nearly 4% lower on fears of a possible global slowdown and destruction following the fresh coronavirus outbreak in top consumer China.
Nifty Technical Outlook
Shrikant Chauhan, Head of Equity Research (Retail), Kotak Securities Limited
“Nifty has also formed a hammer reversal formation on the daily chart, which indicates a strong possibility of a fresh pullback rally from the current levels. For day traders, 15250 would be the sacred support area. And if the index manages to trade above the same, the pullback rally is likely to continue in the near future and may extend to 15500-15600 levels. On the other hand, below 15250, the uptrend will be weak and below that, the index may slide to 15180-15100.”
Nagraj Shetty, Technical Research Analyst, HDFC Securities
“A short body of positive candlestick was formed on the daily chart with short upper and longer lower shadows. Technically, this formation indicates a Doji type candle pattern, but not a classical one. But of a higher wave and Doji pattern.” Formation Back to back in two sessions around the low of 15200, indicating the possibility of a rally in the market.
As per the daily time frame chart, there is a downside order of lower tops and bottoms and the current consolidation indicates an attempt to form a lower higher. Therefore, any attempt to lack strength around the 15500 level could potentially trigger the bears into action.
Nifty short term trend remains volatile with wide range movement. A decisive move above the 15500 level could open an upside rally in the market. Significant support to be seen around 15200 levels.”