Mr. Mustafa Nadeem, CEO, Epic Research
Nifty ends down after a rebound last week with substantial losses as less conviction, lower breadth, and global sentiments weighed down on traders. This is a classic reversal in the market with Nifty making a new high at 10985 in the last few months while traders completely rejected the possibility of any up move being extended while profit booking triggered substantial losses.
While the difference between previous week Close and this week Close remain marginally close the important point to notice is that this is a fourth week we are witnessing Nifty taking resistance at the pretty much same level with a failed breakout above 10950 level. This indicates there is too much noise at present in a market that is an outcome of less conviction and subdued breadth. Despite a rally in a previous week, a failure of extension of same we believe we are in for a consolidation yet again. hence we reiterate our words "No Santa rally", at least in December, for directional traders. With Global markets in panic and performing in a completely bearish momentum, we, for now, cannot expect any outperformance specifically after a number of events that we have seen.
Now; market continues to look at USDINR and Crude for cues and that has what given us some bullish moves from 10500 to 10900. But to go beyond this resistance we need much better volumes, improved breadth, and muted volatility. While back at home Volatility continue to remain muted; It is the global markets and CBOE VIX which is giving us certain hints that worst is not over yet. It is up now almost 225% till date in the year while a recent jump of almost 90% gives us Jitters as a trader.
Western markets took a hit after Fed funds increased the Target from "Neutral 2" to 2.25 - 2.5 for 2019 as they continue to state "Gradual Increase" in rates for 2019 as well. That also gave us a round of another capital flow from our economy that is due for elections in 6 months. Hence a decisive move of money cannot be at least seen during this time of uncertainty.
We remain cautious for a short-term perspective as Nifty is still in a range of 11000 - 10700 and we are now coming out from it ion decisive basis. A close below swing high of 10950 - 11000 Ish levels will give us some directional view. Another important point is the placing of 20 Days MA below the 50 and 100 Days MA. That is another bearish indication for short term. We may see consolidation going forward as most indicators also show weakness in a short-term perspective.
LICHSGFIN - Stock was down nearly 4% in intraday with low volumes. It has strong resistance of 200 EMA and trendline on the daily chart. We recommend selling below 469 for the target of 465 with the stop loss of 573.
JUBLFOOD - Stock has shown the reversal and closed near to days low. It has strong resistance on the daily chart. The RSI is also showing weakness on the daily chart. We recommend selling below 1310 for the target of 1300 with the stop loss of 1320.
TITAN - We saw some profit booking in the stock and it was down nearly 3% in the day. It has a support of the trendline on the daily chart. We recommend buying above 906 for the target of 916 with the stop loss of 900.