It was a scary session for the market. The sell-off across sectors during the latter part of the day sent the Nifty well below 5500-mark for the first time since September 6, 2010. However, it closed above that level. The 50-share NSE Nifty closed at 5512.15, down 92.15 points or 1.64%. The 30-share BSE Sensex slipped 288.46 points or 1.54% to settle at 18,395.97.
So far the Nifty is still above that September break-out level, 5,400, but there are fears among the investors that this is not just a bull market correction, but runs very close to becoming an eight-nine months or one year kind of a bear market situation.
How deep could be the downside?
Karvy Stock Broking sees further downside. “It is clearly selling by these big boys, otherwise the market wouldn’t have come down like this. We are in for a bearish move at least for while longer. We could see some more cuts from the current levels, approximately either 6-8%, hopefully.
Manish Shah, Head Technical Analyst, Fortune Financial Services (India) Limited also expects the markets to go down from the current levels. “In terms of Nifty cash, what has happened now is that the entire uptrend of higher tops and higher bottoms that we saw since March ’09 has been taken out. So, we are seeing first instance of lower low and a lower high in Nifty. What this means is that this entire trend could be reversing and we should be seeing some lower levels from here. I don’t expect the markets to immediately reverse from here probably move down to around 5,250 or so and then there will be a short-term bounce back. But, yes, the sentiment has been damaged substantially. So, it will take some time for the markets to find its feet again and then start going up,” he adds.
Prasun Gajri, CIO, HDFC Life is also bearish on the markets. “If one looks at the market as a whole, sure, I would still be reluctant to kind go overboard and declare that we have seen the worst of this market. So, there is some more pain to come.
According to Anand Tandon, CEO, JRG Securities also, the market should be on the downside for the next one quarter.
Is a pull back on the cards?
Deven Choksey, MD, KR Choksey Shares & Securities expects the markets to pull back from the current levels. "Somewhere down the line I think you are going to see some contra buying taking place," he says. Choksey sees 5,700-5,770 as the range on the upside for the Nifty.
Support for the Nifty:
Mitesh Thacker, Technical Analyst, miteshthacker.com says, the markets are definitely oversold. "Yesterday, with strong selling pressure from the FII side, we broke the 200-day average and we are seeing continuation of selling happening today also. So, I think we still don’t have signals of reversals as yet. My belief is that there could be some support coming in at levels of 5,400-5,380 which was the immediate bottom before the September rally started," he adds.
Tandon also feels that 5,400 is a technical support at the moment.
Should you buy?
Dipan Mehta, Member, BSE and NSE says, investors can enter the market now and average lower. “The risk-reward ratio is coming back in favour of taking long investment or long position in stocks,” he adds.
Baliga also advices long-term investors to start buying. “We have been asking long-term investors to keep investing in small way at every fall because you really don’t know as to where this would stop. Although we have a view that the markets could go to levels of around 5,200, but it’s difficult to call a bottom. So, at every major down day like the way it is today, I think it’s a great day to nibble in. So, one should be investing in a small way,” he adds.
So far the Nifty is still above that September break-out level, 5,400, but there are fears among the investors that this is not just a bull market correction, but runs very close to becoming an eight-nine months or one year kind of a bear market situation.
How deep could be the downside?
Karvy Stock Broking sees further downside. “It is clearly selling by these big boys, otherwise the market wouldn’t have come down like this. We are in for a bearish move at least for while longer. We could see some more cuts from the current levels, approximately either 6-8%, hopefully.
Manish Shah, Head Technical Analyst, Fortune Financial Services (India) Limited also expects the markets to go down from the current levels. “In terms of Nifty cash, what has happened now is that the entire uptrend of higher tops and higher bottoms that we saw since March ’09 has been taken out. So, we are seeing first instance of lower low and a lower high in Nifty. What this means is that this entire trend could be reversing and we should be seeing some lower levels from here. I don’t expect the markets to immediately reverse from here probably move down to around 5,250 or so and then there will be a short-term bounce back. But, yes, the sentiment has been damaged substantially. So, it will take some time for the markets to find its feet again and then start going up,” he adds.
Prasun Gajri, CIO, HDFC Life is also bearish on the markets. “If one looks at the market as a whole, sure, I would still be reluctant to kind go overboard and declare that we have seen the worst of this market. So, there is some more pain to come.
According to Anand Tandon, CEO, JRG Securities also, the market should be on the downside for the next one quarter.
Is a pull back on the cards?
Deven Choksey, MD, KR Choksey Shares & Securities expects the markets to pull back from the current levels. "Somewhere down the line I think you are going to see some contra buying taking place," he says. Choksey sees 5,700-5,770 as the range on the upside for the Nifty.
Support for the Nifty:
Mitesh Thacker, Technical Analyst, miteshthacker.com says, the markets are definitely oversold. "Yesterday, with strong selling pressure from the FII side, we broke the 200-day average and we are seeing continuation of selling happening today also. So, I think we still don’t have signals of reversals as yet. My belief is that there could be some support coming in at levels of 5,400-5,380 which was the immediate bottom before the September rally started," he adds.
Tandon also feels that 5,400 is a technical support at the moment.
Should you buy?
Dipan Mehta, Member, BSE and NSE says, investors can enter the market now and average lower. “The risk-reward ratio is coming back in favour of taking long investment or long position in stocks,” he adds.
Baliga also advices long-term investors to start buying. “We have been asking long-term investors to keep investing in small way at every fall because you really don’t know as to where this would stop. Although we have a view that the markets could go to levels of around 5,200, but it’s difficult to call a bottom. So, at every major down day like the way it is today, I think it’s a great day to nibble in. So, one should be investing in a small way,” he adds.
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