This Level Could Be Retested If Nifty Breaks Support, Says Analyst
Investors should avoid buying new stocks until 22,400 is not taken out decisively, says Soni Patnaik, assistant vice president of JM Financial Services Ltd.
The NSE Nifty 50 dipped to 22,100 and these levels could act as good support, according to Soni Patnaik, assistant vice president of JM Financial Services Ltd. Not much of an upside movement is visible in the markets, as the options metrics data indicates a lot of calling writing at 22,300/400, Patnaik said.
“The upside can be restricted, or there can be a sell-on-the-rise market until and unless the global issues or tension are settled,” she said.
If the benchmark breaks the 22,100 level on a closing basis, then the 21,900/800 levels can be retested again. Investors should avoid buying new stocks until 22,400 are taken out decisively, she said.
The Bank Nifty has broken the support level of 48,000 and is currently testing the level of 47,300, according to Patnaik. “Bank Nifty is on the cusp of its support right now—47,000 being good support.”
Investors should initiate fresh longs only when Bank Nifty reaches above 48,200 levels. They should avoid and be more cautious if these levels are not reached, she said.
Deepak Nitrite Ltd. and LIC Housing Finance Ltd. are her recommendations.
The NSE Nifty 50 closed 124.6 points, or 0.56%, lower at 22,147.9 and the S&P BSE Sensex declined 456.1 points, or 0.62%, to end at 72,943.68.
There was no relief for the bulls as the index commenced the session lower, but as the day progressed, a relief rally was seen, according to Aditya Gaggar, director of Progressive Share Brokers Pvt. "However, another round of selling dragged the index further lower but towards the end."
On Tuesday, the Nifty IT closed 888.65 points, or 2.58%, lower at 33,574.95. If the interest rate cut gets postponed or delayed in the US, it can affect discretionary spending in the BSFI sectors further, putting a lot of pressure on the IT sector in India, said Dharmesh Kant, head of equity research at Cholamandalam Securities Ltd.
The quarterly results of Infosys Ltd. on Thursday will help decide the future course of this sector, he said.
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