Profit booking by the weak hands a day after the Nifty conquered 20,000 led to the benchmark closing tad below the key level at 19,993.20. The Sensex too settled flat at 67,221.13. The broader markets saw widespread correction. The Nifty Next 50 tumbled 2.30%. Nifty Media and Realty index tanked the most with losses around 4%, while Metal and PSU Bank stocks also plunged over 2%. IT and Pharma stocks were the only gainers with their respective gains of 1.03% and 0.12%.
The relative volatility in the market was higher and the VIX was up by 3.01%.
Commenting on today’s trading session Vinod Nair, Head of Research at Geojit Financial Services, said that, “The correction is happening on midcaps while large caps are maintaining their strength. This cautious trend can prevail in the short-term, but the end-game is on the rise of the domestic economy, surprising upside in corporate earnings, and change in domestic investment patterns, which is expected to continue on a long-term basis.”
Nifty 50 Technical Outlook
With the Nifty closing below the 20, 000 mark, Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas, said that, “We believe that the index is due for consolidation after a sharp rally in the last seven trading sessions. The range of consolidation is likely to be 20,100 – 19,800. Momentum indicators on the daily and hourly time frame are providing divergent signals which could lead to sideways consolidation.
“Overall, the short-term outlook is positive and this consolidation is likely to be used as a buying opportunity. In terms of levels, 19,865 – 19,810 is the crucial support zone while 20,200 – 20,250 shall act as an immediate hurdle zone,” Gedia added.
Bank Nifty outlook
Bank Nifty slipped 0.13% to settle at 45,511.35. Commenting on the technical outlook of Bank Nifty index, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities, said that, “After a remarkable upward movement over the past week, the market experienced selling pressure from higher levels. Call writers have significantly increased open interest at the 46,000CE strike, which is now acting as a strong resistance level. On the downside, key support is seen at 45,200, and if it manages to hold this support, we could witness some recovery towards 45,600 or 45,800 levels.