What is your weekend view for the Nifty and the Sensex for Friday 30 October? Do you see the Sensex bouncing and how much lower could it go?
Answer
Answer
On Thursday, the F&O settlement day for the month of October, the Nifty fell below the 11,700 mark to close at 11,670 levels. In the last few days since the Nifty briefly crossed the 12,000 mark, Nifty has lost nearly 400 points.
Ironically, it is the most heavyweight stocks like TCS, Infy and RIL coming under pressure. While in all these stocks, some profit taking after the rally was expected, the markets just do not have enough triggers for a fresh rally at this point of time.
However, there is some good news too. With the VIX still steady in the 20-22 range and the options OI data hinting at a range of 11,600 to 12,200 on the Nifty, it could be close to bottoming. However, the MSCI re-allocations could be the key trigger for Indian markets.
On Thursday, the foreign portfolio investors were net sellers to the tune of Rs.421 crore while DFIs sold Rs.253 crore. That is not too significant so it does look like most of the market correction is coming from unwinding of leveraged positions in the market.
Global cues have stabilized on Thursday. After the sell-off in the last few days, the Dow and the NASDAQ were up over 1.4% on Thursday, European markets were flat but Asia appears to be under pressure. SGX Nifty is quoting lower and the Asian cues may be critical.
More than the Friday trade on 30 October, just focus on next few days of trading. I have already given a number of trading ideas and there are not changes as of now. For now there are no fresh ideas and the best is to wait for markets to stabilize.
The view is that 11,600 should offer support for the Nifty and the big support for the markets could come from the Reliance Industries results on Friday evening. That could set the tone for the market and like always, it could have a surprise in store.