Is there a deeper market correction on the cards? This is what the analysts say


Indian stock markets closed sharply lower today, following a selloff in other global markets after an overnight slide in tech stocks on Wall Street. The top-line NSE Nifty 50 Index closed 1.68% lower at 11,333.85, while the S&P BSE Sensex was down 1.63% or 633 points at 38,357.18.

During the week, the Nifty fell 2.69% and the Sensex 2.81%. The Nifty banking index closed 2.21% lower after the Supreme Court ordered banks on Thursday not to declare any loans that were standard at the end of August as delinquent until new orders are filed. ICICI Bank Ltd fell 2.7% and HDFC Bank Ltd fell 1.1%.

India’s most valuable company, Reliance Industries Ltd, fell 1.7%. Carmaker Maruti Suzuki India Ltd was the winner among Nifty, 50 shares, closing 1.7%.

Here’s what analysts had to say about the current market performance:

Shrikant Chouhan, Executive Vice President of Equity Technical Research, Kotak Securities

“Technically, the index has formed a type of Bar Reversal formation that clearly indicates high chances of a further correction from current levels. Market texture is weak and weakness is likely to continue in the near term. For the next few sessions 11420 should be the sacrosanct level for traders, trading below it, we can expect a further price correction to 11250. On the other hand, trading above 11420 can trigger a rapid retracement rally to 11500-11550 ” .

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Nagaraj Shetti, Technical Research Analyst, HDFC Securities

“The crucial multiple lower supports around 11350-11380 (previous swing low, minor uptrend line and 20-day EMA) have been broken today and Nifty closed just below that zone towards the end. Therefore, a decisive fall below this zone could open further weakness in the short term.

Nifty, on the weekly time chart formed a reversal pattern as a bearish engulfing. This is an important pattern on the weekly chart, which has not formed in recent months. The recent attempt to break up a significant intermediate uptrend line (intermediate trend line as per the change in the weekly / monthly polarity chart) has turned out to be a false breakdown to the downside. this is a negative indication.

Nifty’s short-term trend is down after a small bounce to the upside. Any attempt to bounce to the upside from the lower support at 11300-11325 could be a short-term upside opportunity. A dip below support could open up broader weakness in the market towards 10800 levels for the next few weeks. “

Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments

“We managed to stay above the 11300 level, which is a saving grace for the bulls until the markets reopen on Monday. If we break above this level at the close, we could enter a short-term bearish phase. On the bright side , we need to get above 11600 for the markets to continue their bullish momentum. “

Nirali Shah, Senior Research Analyst, Samco Securities.

“It would be advisable for traders to lighten their long positions in the market and maintain a negative outlook with a rally sell strategy. Once the immediate support at 11100 breaks to the downside, Nifty50 could head to test the lower end of the channel. which is placed at the 10700 levels. Immediate resistance is now placed at 11600. “

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