The Indian market snapped its four-day winning streak as bears took control of D-Street, following a muted trend in global markets. The Sensex fell by about 150 points to 40,558 and the Nifty failed to hold on to 11,900 levels.
Sectorally, the action was seen in telecom, power, capital goods, and oil & gas, while profit-taking was visible in IT, banks, healthcare and finance.
Experts feel the volatility in the market is likely to continue in the run-up to US elections. They advise traders to track crucial support levels in case the index starts to drift southwards.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities, said the strategy should be to buy Nifty if it crosses 11,950 levels. “In that case, Nifty could move up to 12,050 or 12,100 levels.”
He said going short is advisable if the Nifty breaks 11770 levels. “Support exists at 11,600-11,660 levels. Be stock specific until the market is not breaking the trading zone, which is hovering between the range of 11,770 and 11,950 levels.”
Here is what experts have to say on what investors should do on October 23:
Vinod Nair, Head of Research at Geojit Financial Services:
Profit booking is seen in major sectors like banking, pharma and IT post the recent rally. Till now, the Q2 result is positive but a lot is factored in the market. The stocks could feel the pressure in the near term given high valuations. However, optimism can continue as earnings trajectory stays in line with the estimate. Western markets are dull too as US fiscal stimulus talks are getting delayed further and focus is drifting to the US election outcome.Nagaraj Shetti, Technical Research Analyst, HDFC Securities:
After the formation of a bearish engulfing pattern of October 15, Nifty has failed to show any weakness below this pattern (11,661) in the last five sessions. Technically, this could be a positive signal for the bulls to maintain an upper level.
Presently, the high low area of that engulfing pattern is acting as a band for the Nifty around 12,025-11,660 levels. The short term trend on the Nifty is rangebound with minor weak bias.
There is a possibility of continuation of rangebound action around 11,850-11,950 levels by the next session. Immediate supports to be watched at 11,800 and crucial upside hurdle is placed at 12,025.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The Nifty traded in a narrow range today and formed an inside bar on the daily chart. The overall structure shows that the index is in short term consolidation mode that is taking a shape of a triangular pattern on the hourly chart.
The Nifty can continue with the sideways action for some more time, whereas the broader market indices look prepared to move out of the consolidation. In the case of Nifty, 11,820-11,800 will continue to act as a near-term support zone.
A fresh move on the upside will be considered to have started once Nifty crosses the swing high of 12,025. Beyond that, the benchmark index will be set for a significant upside.
Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial ServicesNifty traded inside the lower shadow range of the last session and broken its four-day winning streak to settle near 11,900. It formed a Doji candle and an inside Bar on a daily scale, indicating a tug of war between bulls and bears to get a decisive range breakout from the 11,800-12,000 zone.
Overall price and data setup suggest bounce may be seen, but multiple hurdle and supply pressure at higher zones could restrict its upside momentum with higher volatility.
Now, the Nifty has to hold above the 11,800-11,820 zones to witness an up move towards 12,000-12,100 levels. On the downside, key support exists at 11,777-11,750 levels.
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