Investors should use pullback rallies to exit long positions, suggest experts.
Indian markets closed lower after starting firmly in green on Friday. Both Sensex and Nifty posted biggest monthly decline since October 2008.
The Nifty50 erased more than 700 points while the Sensex plunged 2,400 points in September. Although, last-hour recovery helped Sensex to hold 36,200 and Nifty 10,900 levels.
The index looks oversold and chance of a pullback rally is on cards
Investors should use pullback rallies to exit long positions, suggest experts
Technically, if the index sustains below 10,850 then the pressure would increase on the downside and we may see Nifty testing its 200-DMA which is placed near 10,770.
On the other hand, the 11150 – 11170 levels are strong resistance zone and only a decisive move beyond this level will attract fresh buying interest.
What to watch out for this week:
All eyes are on the meeting of MPC meeting lined up this week. The committee will announce the outcome of the meeting on October 5.
According to a Reuters poll, the central bank might raise interest rates in early October, despite relatively tame inflation, to prop up a falling rupee.
In the primary market front, Dinesh Engineers will close for subscription on October 3. On Day 1 of the issue, it was subscribed 5 percent.
Auto companies will also be declaring their sales data for September. August was largely mixed as automakers grappled with floods in Kerala during the festive season of Onam, which could have impacted sales. Stocks like Maruti, Tata Motors, M&M, Eicher, TVS etc. will be in focus.
Technical View:
Nifty formed a bearish candle for the fifth consecutive week
Three levels to watch out: 10,770| 10,800| 11,170
Max Call OI: 11500, 11200
Max Put OI: 11000, 10800
Technical Recommendations:
We spoke to Way2Wealth Brokers Pvt. Ltd and here’s what they have to recommend:
ITC: Buy| LTP: Rs 296.70| Buy around 295| Target: Rs 315| Stop Loss: Rs 287| Return 6%
Titan Company : Sell| LTP: Rs 805.50| Sell around Rs 820 – 825| Target: Rs 740| Stop Loss Rs 861| Return 8%
V-Guard: Sell| LTP: Rs 176.35| Sell around Rs 180 – 182| Target: Rs 150| Stop Loss: Rs 194| Return 14%
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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