Nifty: Scrip specific movements

Nifty:  Scrip specific movements
Highlights

Nifty continued its fall for the third week in a row and lost more than two per cent during the week and the...

SastryNifty continued its fall for the third week in a row and lost more than two per cent during the week and the entire fall came on Thursday due to weak global cues on account of US Fed decision to phase out QE programme. During the current derivative series, Nifty lost more than 7.5 per cent and is entering the last week of derivative expiry. In view of the last week of derivative expiry, stock specific movements can be expected and bearish scrips such as bank, auto, metals can be expected to drift down further while generally bullish sectors such as pharma and IT might perform better. Since rupee has depreciated further and is close to Rs 60, it will disturb the macro fundamentals. Further, technically, Nifty is trading below all key long term averages and is weak and the only ray of hope is that 50 DMA is above 200 DMA and till the above condition is in force, long term bullishness can be considered to be intact. Despite fundamental factors, our market is fairly valued and is below long term PE multiple and any further fall would make it attractive from long term point of view. Hence, investors with long term horizon can invest in select scrips on SIP basis or in suitable installments. Nifty is bearish in short term and has been oscillating quite frequently and would get into bullishness on a close above 5800 in first half of the week and above 5750 in second half of the week. Downside for Nifty would get opened if it breaches the current year low. On the other hand, if it consistently trades above 5900 mark, there would be a hope of a new high for the year. For the coming week, Nifty spot is expected to face resistance at 5745, 5820, 5900 and find support at 5590, 5520, 5445. Nifty, presently in bearish, will get out of short term bearishness only on a close above 5800 in first half of the week and above 5750 in second half of the week.
Advice for Traders
Nifty resumed its short term bearishness on account of global cues and appears in the bottoming out process for short term. In view of the derivative expiry week, stock specific movements are to be expected. In respect of Nifty, it's better not to consider short positions below 5600 in view of the strong support around 5575. If Nifty trades above 5700, risky long positons can be considered. Trading in options too is advised with the above stated strategy. Further, weekly open level is very important for the entire week. Short positions may be avoided as long as it maintains / closes above weekly open and vice versa.
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