Most technical experts are advising investors not to go short at current levels because there is a higher probability that we could see a relief rally in markets.
Indian markets fell for the sixth consecutive week to record its largest one-day fall since August 2015.
For the week, Sensex lost 5 percent while Nifty saw an erosion of 5.6 percent.
The market cap of BSE listed companies saw notional wealth erosion of over Rs 8 lakh crore in just one week.
Not to forget, rupee hit a fresh low against the US Dollar at Rs 74.23/USD and now most experts are penciling a number close to Rs 75/USD in FY19.
Foreign investors have pulled out over Rs 9,300 crore (USD 1.3 billion) from the Indian capital markets in the last four trading sessions on unabated fall in rupee and rise in crude oil price.
The latest withdrawal comes following a net outflow of over Rs 21,000 crore from the capital markets (both equity and debt) last month. Prior to that, they had put in a net amount of Rs 7,400 crore in July-August.
Three crucial factors will play very important role this week: movement of rupee, crude oil prices and earnings from India Inc.
Another thing to watch out today is the new kid on the block. The Non-banking finance company Aavas Financiers is set to debut on the bourses on October 8.
The final issue price has been fixed at the higher end of the price band at Rs 821 per share. The Rs 1,734-crore public issue managed to garner 97 percent subscription during September 25-27.
Expensive valuation is one reason behind the conservative comments from experts. Most experts advise investors to exit on the listing day itself, even if it lists below Rs 800 per share, as it looks overvalued at the current juncture. The best time to enter the counter is at 2-3.5 times book.
Big News:
Well this week marks the beginning of the September quarter earnings
26 companies will announce their quarterly earnings this week including TCS, Hindustan Unilever, Bandhan Bank, Zee Entertainment, Karnataka Bank, AU Small Finance Bank and Avenue Supermarts.
Brokerage houses expect the topline growth for the quarter could be more than 20 percent but bottom line growth may be in single digit which likely to be impacted by weak operational performance.
Technical View:
Nifty formed a bearish candle on the daily and weekly charts.
Most technical experts are advising investors not to go short at current levels because there is a higher probability that we could see a relief rally in markets.
Crucial support for the market is placed at 10,000 adding in case of a pullback attempt, the initial hurdle can be expected around 10,550 levels.
Three levels: 10,000, 10200, 10500
Max Call OI: 11000, 11200
Max Put OI: 10500, 10700
Technical Recommendations:
We spoke to Indiabulls Ventures Ltd and here’s what they have to recommend:
Axis Bank Ltd: LTP: Rs 568| Target: Rs 650| Stop Loss: Rs 530| Return 14%
UPL Ltd: Buy| LTP: Rs 598.20| Target: Rs 700| Stop Loss: Rs 560| Return 17%
Cipla Ltd: LTP: Rs 634.55| Target: Rs 730| Stop Loss: Rs 610| Return 15%
Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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