Mr. Arun Kumar S, Market Strategist, Reliance Securities Ltd expects a near term reversal and bearish sentiments in the markets today.
EQUITIES
• NIFTY(10305) formed “Bearish Engulfing” pattern which indicates a reversal. Expect the index and most heavy weights to react over the next few days.
• Key support zone for the index has been shifted to 10270 – 10050 – 9890, while it could face headwinds near 10425 – 10390.
• BANKNIFTY (21427) also formed a “Bearish Engulfing“ pattern. This index witnessed the most selling and could react strongly on the downside.
• Most sector indices on NSE have formed “Bearish Engulfing” pattern. A negative close today will confirm further fall.
• The supports for this index falls around 20730 – 20280 – 20200. The near-term resistance zone has been shifted to 21850 – 21950.
• The market breadth turned negative after 5 positive days on the NSE cash segment.
• Weak hands took aggressive long positions yesterday. They are bound to stopped out – this may lead to some panic selling.
• FIIs were net buyers for the 5th straight day, while the DIIs sold net on the equity cash segment.
CURRENCY
• Dollar Index (97.275) moved up sharply and formed a “Bullish Engulfing” pattern due to which it may attempt to test 97.50 – 97.73.
• USDINR (75.7213) could consolidate briefly and then extend its appreciation to 75.45 – 75.25.
BONDS
• US Govt. 10 yr yields (0.6675) yields extends its non-trending phase on near-term.
• Govt of India 10 yr yields (5.918) yields on the way to test 5.95.
COMMODITIES
• Crude futures – displays signs of correction.
Also read: COVID impact: Changes and opportunities expected in India’s Capital Market industry
