Dalal Street Corner: Selling pressure continues for 3rd session today; what should investors do on Friday?

The Indian markets closed Thursday’s session in the red, with selling pressure extended for the third straight session today. The BSE Sensex slipped over 300 points, while the Nifty was below the 18200-level. The weakness mostly came from IT stocks, followed by metal, FMCG, and pharma at the market close. 

The majority of the analysts believe the benchmarks are taking support at a lower level between 18,050 and 18,100 in apparently a range-bound trading on the Nifty index. 

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In this regard, Choice Broking AVP Research Sachin Gupta said, “The index, technically, has taken good support at Middle Bollinger Band and 21 SMA on a four-hourly chart and indicates further support in the index.” 

He added, “Moreover, it has also formed a Bullish Hammer Candlestick pattern, which suggests a strength in the index and has immediate support at the 180,50 level, while an upside resistance comes around 18400 levels.” 

Similarly, Mohit Nigam, Head – PMS at Hem Securities believes that the profit booking, which was witnessed today, is healthy for the market and any significant dip is an opportunity to accumulate quality stocks with immediate support for the Nifty 50 is 18,000. 

“The broader market is witnessing a sell-off compared to benchmark indices as we can say that some stocks, which have massively rallied in the last one month and were trading at quite bit stretched valuations, had witnessed a major profit booking in the last 2-3 days”, Nigam added. 

Meanwhile, Rohit Singre, Senior Technical Analyst at LKP Securities pointed out, “In the last one hour, the Nifty witnessed a strong pull back from the good support zone of 18100. Moreover, longs can behold until it is managing above-said levels and on the higher side immediate resistance is formed near 18280-18350 zone and fresh move possible only above 18400 zone” 

Vinod Nair, Head of Research at Geojit Financial Services expresses, the sell-off continued due to weak Q2 results, a bearish global market, and profit booking in the IT, metal and realty stocks.  

“However, the banking index, especially PSBs, moved with confidence on the expectation of good quarterly earnings. High volatility forced foreign and domestic institutional investors to remain net sellers" Nair added.