Indices poised at key supports

Crude oil prices moving above $72 per cent a barrel added to market worries. A strong rally above $74 can take it to multi-year highs.

On the domestic front, the September month auto sales data can have an impact on the auto stocks. And markets are closed on Tuesday on account of Gandhi Jayanti, bringing relief to investors. The continued depreciation in the rupee and the RBI’s monetary policy need a close watch.

The Nifty mid and the small-cap indices nose-dived sharply in the previous week, tumbling 6.5 per cent and 10.8 per cent respectively. Following this fall, there could be value buying in these sectors. Investors should continue to tread with caution in the coming week as well.

  Nifty (10,930.4)

Taking cues from global markets, the Nifty 50 index started on a negative last week and continued to decline due to concerns on financial stocks.

The index fell by 212 points or 1.9 per cent last week, breaking a key support at 11,000. It plummeted 750 points or 6.4 per cent, almost fully eroding the gains made in July and August.

Short-term trend: With last week’s sharp fall, the short-term trend is down. Since registering a new high at 11,760 in late August, the Nifty index has been on a short-term downtrend. While trending down, the index had breached key supports at 11,300 and 11,000.

To alter the downtrend, the index needs to rally decisively above 11,300. Such a rally can take the index northwards to 11,500 and 11,700 levels. A corrective rally can encounter resistances at 11,150 or 11,250.

The daily relative strength index features in the bearish zone but is showing signs of recovery from the oversold territory. The weekly RSI is charting down in the neutral region. Both the daily and weekly price rate-of-change

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