The Indian market was able to close green after losing a six-day trend despite selling pressure during Monday’s close. Led by banking and auto stocks, the headline index Nify50 and the Sensex closed up 0.38% and 0.34%, respectively, as the former ended above 15,800 and the latter rose nearly 200 points.
Rupak Dey, senior technical analyst at LKP Securities, said the Nifty was about to consolidate in a narrow range as the benchmark index failed to provide any directional movement.
“The sideway pattern could continue as long as the Nifty closes between the tight bands of 15800 and 16000 on a closing basis. A decisive breakout on both sides could trigger a decent move towards a breakout,” the expert said.
Exceeding the benchmark indicators, the Nifty Midcap and Small Cap, which have been under intense pressure for the past two weeks, have closed up more than one per cent. Meanwhile, amid high volatility, the India Volatility Index (VIX) has stabilized near the 25-mark.
IT, FMCG, healthcare and consumer durable stocks saw the biggest selling pressure as indicators related to all these sectors closed in red, while others went green.
According to Binod Nair, head of research at Geojit Financial Services, sales by FIIs continue to rise as they restrict high-yielding US bonds to the Indian market to hold its pull-back rally, despite the interest of domestic investors.
“The weakness of global equities with unfavorable global signals led to heavy sell-offs towards closing times, as investors lacked confidence to advance their position. Investors are currently at a risk-reduction stage, looking for safe haven investments,” Nair said.
Meanwhile, some stocks had a focus based on their recent movements. These stocks were Punawala Finkorp, Nazara Technologies and Hutson Agro Products. Here’s what Amal Athawale, Deputy Vice President – Technical Research, Kotak Securities Ltd. advises investors on what to do with these stocks..
As of Friday this month, the stock has corrected more than 20 percent. On the daily and weekly charts, it is consistently creating lower top formation which is largely negative for Punawala Fincorp Limited. After a sharp fall, the stock took support near the 200-day SMA or 215 and bounced quickly. Despite the volatile market conditions, they were in a positive position throughout the day. Technically, the medium-term formation is still weak but the pullback rally is likely to continue if the stock manages to trade above 237. For Momentum traders, 237 will be the key support level. And, if the stock manages to trade above the same, we can expect a continuation of the pullback rally to 270-280. However, the uptrend below 235 will be weak.
Over the last few quarters, the stock has been facing resistance at consistently high levels. It has consistently formed the Lower Top Series. After a long correction, the stock finally took support near 1050 and returned quickly. However, the short texture of the stock is non-directional and volatile. For traders, now 1175 will be the important support level. On top of that, the continuation of the pullback assembly will last from 1350-1400. On the flip side, a new round of sales below 1150 is possible. As a result, the chances of hitting 1100-1050 will become brighter.
Hatsun Agro Products
So far this month, the stock has improved about 20 percent since Friday. Last Friday, the stock opened with a negative note and broke the important support of 960. Weakness intensifies throughout the day after the breakdown. Sharp price correction, including strong volume, indicates further weakness from the current level. In addition, on the intraday chart it has consistently held a low top structure which also supports short-term weakness. As long as its turnover is below 920, the chances of hitting 800-775 will be bright. Conversely, a brief recovery is possible only after dismissing the 920 above the same, they may re-examine the level of 960-1010.