Nifty squandered all its day’s gains in the last one hour of trade to close below the psychologically important 9000mark, as global markets continued to stumble on the coronavirus pandemic fear.
If the bulls fail to recover and manage a sustainable close in the next one or two trading sessions, then the Nifty can initially head to retest recent lows of 8555.
But, if the market continues to fall, as being suggested by its unpredictable but high velocity on the downside, then one should prepare to see much lower level, with logical targets present around 7946.
Considering indiscriminate selling across the board, including in blue chip counters, investors should wait for some prolonged consolidation phase at lower level.
On monthly chart index has good support at 8500 zone and 100 DMA is also place at 8435 zone hinting any break below said levels can create some more pressure in indices, resistance area 9150/9300 zone. Traders can use said levels to create fresh short near these level.
After trading in the positive for the majority of the day, the indices turned red during the last hour of trading, with selling mainly seen in Financials. European markets and Dow futures added to the negativity. Covid-19 showed no signs of abatement and with Central Banks monetary policy actions having limited impact, calls were out for more actions to contain the spread of the virus.
It is difficult to protect equity portfolios in these volatile times and retail investor should hold on to their portfolios without throwing in their prized silver to the volatilities and risk aversion. Instead of getting carried away by the risk aversion, the retail investor should look at it as an opportunity by the market, to buy and select good quality companies/ stocks at reasonable valuations, if one has an investment horizon of more than 2 years. It is difficult to time the market, hence one should stagger their purchases and hold on to it through the rough ride.
Market participants should avoid risky bets and invest in a phased manner.
Sector Wise : Except FMCG and Pharma, all other indices ended in the red. Midcap and Smallcap indices shed 1-2 percent.
- Someshwar, Technical analyst, Equidius Research