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Nifty: Buy on deep declines

Nifty: Buy on deep declines
Highlights

Nifty experienced one of the worst weeks falling on all the five days of the week and losing more than 4%. Story of midcap stocks is pathetic and most...

mif2Nifty experienced one of the worst weeks falling on all the five days of the week and losing more than 4%. Story of midcap stocks is pathetic and most midcap stocks experienced bloodbath. Current week is a truncated one with two holidays and high degree of volatility can be expected in view of derivative expiry. Further scrip specific volatility too is to be expected due to F&O expiry. Also, financial year ending also could have its usual effect in view of NAV value of mutual funds and large cap stocks might fare relatively better. As Nifty is into oversold territory, a reasonable pullback can be expected from next week (first week of April). Technically, strong support is seen around 5550 level from which level strong recovery can be expected. At the same time resistance is seen around 5800 which if crossed, further pullback can be expected. Hence Nifty levels are 5550 on the lower side and 5800/5950 on the higher side. In view of holidays too, volumes could get impacted except on Thursday (last day of derivative settlement). Midcap stocks, which had fallen sharply are and a reasonable recovery can be expected giving room for further fall thereafter. Short-term traders need to be ever vigilant tracking short term movements and investors with medium and long term outlook can invest in quality stocks on SIP basis. For the coming week, Nifty spot is expected to face resistance at 5725, 5800 and find support at 5575, 5500. Nifty is in neutral zone and gets into bullish zone above 5970 and into bearish zone below 5850. However, strong resistance too is there around 6000 and caution is advised at higher levels.
Advice for Traders
Scrip specific movement can be expected in view of Derivative expiry and better to keep away from Bearish stocks as they could drift lower further. However, a deep decline on the last day of F&O settlement could be used to buy keeping in view the new settlement and a reasonable pullback as strong support is expected for Nifty around 5550.
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