Nifty to continue its downtrend for lower targets of 10600 - 10700 : Epic Research
Mr. Mustafa Nadeem, CEO, Epic Research
Nifty tanked as major sell-off takes it to Sub 11K mark while closed at 11143 and Sensex tests below 36K levels. Nifty and Sensex were down due to widespread selling that was seen in the Financial services sector as credit risk emerged post-ILFS firesale and concern over its interest repayment. Yes bank added fuel as RBI trimmed the CEO's term while pointing to its loan book quality and NPA discrepancies.
The sell off was seen as some major stop losses were being triggered at lower levels. That possibly was one of the reasons as Nifty declined to below 11K mark within few minutes and recovered sharply. It was all a matter of 8-10 minutes that took a toll on retail investors.
Technically, a breakdown is seen on the daily scale which looks similar to Head and Shoulder which is a reversal pattern. A close below is neckline as well while the point of inflection is now placed at 11300. It will be a very strong resistance now since volatility has increased as well with bears taking full control.
We previously mentioned as well the importance of 11550 being not breached and for Nifty to reclaim its bullish trend it was very much necessary and below that we continue to maintain sell on advances as a strategy. That level is now placed at 11300 and we expect Nifty to continue its downtrend for lower targets of 10600 - 10700.