Dalal Street Corner: Profit booking continues for 2nd day on D-Street! What should investors do on Thursday?

The Indian markets for the second straight session ended negative on Wednesday, the selling pressure, perhaps, continued from both the institutional investors. The BSE Sensex declined 456 points or 0.74 per cent at 61,259.96; while Nifty50 tumbled 136 points or 0.74 per cent to 18,282.3. 

The weakness in the market mostly came from metal stocks, followed by auto and FMCG – Hindalco today become the top Index loser, down 4 per cent; while Bharti Airtel gained by 4 per cent to become the top gainer in an otherwise subdued market today. 

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“Indian Benchmark Indices extended its downward rally and were trading near day's low as heavy selling was seen in realty and metal stocks. We believe the profit booking which was witnessed today is healthy for the market and any significant dip is a good opportunity to accumulate quality stocks. Immediate support for Nifty50 is 18,100, Hem Securities Head – PMS Mohit Nigam said.  

According to CapitalVia Global Research’s Head of Technical Research Ashis Biswas, “The market witnessed a correction and an attempt to hold the level around the Nifty50 level of 18200. Research suggests that 18200 will be an important support zone for the market to stay positive in the short term. If it fails to sustain 18200, the correction would continue till 17950-18000 in the market.”  

“On the technical front, the index has confirmed the bearish engulfing candle pattern which points out the weakness in the counter for the upcoming session”, said Choice Broking Research Associate Palak Kothari. “The stock has been trading with a support of 9 Days Moving Average, which suggests sustained above the same can continue the uptrend on a daily chart.” 

“In addition, a momentum indicator RSI slipped from an overbought zone and Stochastic has suggested negative crossover. Currently, the Index has immediate support at the 18200 level while an upside resistance is intact at 18600 levels”, she added. 

Similarly, Geojit Financial Services Head of Research Vinod Nair said. "The ongoing market correction is not an overreaction and can sustain in the near-term due to high valuations. However, in the future Indian corporates will benefit from the reforms and China plus one strategy.” 

He added, “Alongside, the long-term economy and market trend is intact due to further re-opening of the economy, low-interest cycle and fiscal and private spending. This correction will give leeway for value-buying, defensives and upcoming stocks and sectors that evolved from this new demand."