Buy L&T, Emmvee and RR Kabel once market selloff eases: LKP’s Rupak De
Nifty’s five-day slide has pushed it to a several-week low and below its 50-day exponential moving average, raising the risk of a deeper correction, says
Nifty’s five-day slide has pushed it to a several-week low and below its 50-day exponential moving average, raising the risk of a deeper correction, says Rupak De of LKP Securities. He sees 23,600 as the immediate support; a decisive breach could accelerate selling. The market’s broader trend will remain weak unless the index reclaims the 24,000 mark, he said.Edited excerpts from a chat:The five-day non-stop selling has revived concerns of a longer downturn in the market. What does the weekly candle indicate on where we are likely to end the July series?The Nifty slipped from the consolidation on the daily chart on Thursday, with follow-up selling taking the index to 23600 on Friday. Besides, the index has fallen below the 50 EMA as well, confirming a new downtrend for the short term. The weekly chart looks more scary. Over the last four weeks, the Nifty has failed to rise above the 50-week EMA, as sellers remained strong at the higher levels while buyers remained fragmented. Now that the Nifty has closed at a several-week low, the chances of further weakening look imminent. Immediate support is placed at 23600. A fall below 23600 might trigger a severe correction, as investors would be running away, putting the Nifty at greater downside risk. On the higher end, 24000 will become the line of polarity.
Unless the Nifty moves higher to reclaim 24000, the broader trend is likely to remain weak.Banking stocks triggered the initial correction, but selling subsequently spread across sectors. Is Bank Nifty still leading the market lower, and where do you see its next support?A few days back, the banking big boys were trading with their loud voices, especially ICICI Bank and SBI. But in the last two days, the scenario has changed, with the market being pulled down by stocks like HDFC Bank, SBI, and Axis Bank. The index has slipped below both the medium-term 200 DMA and the short-term 50 EMA. The RSI is in a bearish crossover and falling, indicating weakening momentum. The situation looks a bit weak, and banking stocks might weaken further, at least as long as the index remains below 57000. On the lower end, support is placed at 56000/55000.India VIX moved higher as crude oil crossed $100 and foreign investors continued selling. What are the options data, open-interest structure and volatility indicators signalling for the coming week?Panic rose as Brent Crude futures climbed above $100, sending India VIX above its 200 DMA. However, it was short-lived for the time being, as India VIX retreated due to some correction in crude oil prices. A short-term cap is placed at 15. The next round of panic might overwhelm the market if India VIX crosses above 15.
The BriefWire