NIFTY Index Chart Analysis

Indian stock markets continued with their losing streak where the bears washed off the reversal attempt made by the bulls during last week. The continuing global concerns and mixed second quarter earnings kept the pessimism going, despite some relief in the oil prices and a pause in the decline of the rupee. Brent oil has tumbled below its major support at 78.80 levels from its recent top of 86.74, giving lower tops and lower bottoms. The reason being the top crude exporter Saudi Arabia promised continuous supply. However, the result of the US sanctions against Iran’s export starting in November and the supply cut from Saudi could bring a sharp bounceback in the oil prices. Further, fear of interest rate hikes from both Fed and RBI in December 2018 have kept the investors cautious. China reported slowest pace of its economic growth since 2008 global economic crisis and the growing worries of trade war has kept the markets across globe on its toes. All-in-all, the not-sogood domestic factors and the global fears are the reason that Indian markets are not sustaining any rebound. The country political-economic arena is action-packed with ongoing earnings and the upcoming state elections followed by the results, which will direct the markets in the coming sessions. 

The FIIs continued to be the net sellers and the DIIs have tried to cushion the impact, but with trivial entries Market breadth has been weak as broader indices, in step with the benchmark indices, retreated after a bounce-back last week, but were refrained from breaching the previous lows. On the sectoral front, mixed IT results and profit-booking dragged the index down to become the top loser with loss of 6%. Auto too followed suit and lost 3% after mixed sales numbers. FMCG became the saviour and gained 4% in the last 15 days.

As mentioned earlier, our benchmark index, Nifty is still struggling at 10200- 10100 levels. During last week, Nifty had bounced back from 10138 to 10710, which was just below 10758, which is 38.2% retracement of its downward rally from all-time high, to 10138. However, Nifty gave a bearish engulfing pattern on October 17 and witnessed four consecutive downbeats as of October 23, where it breached the previous support at 10138, though not on a closing basis. Nifty has almost touched 10100, making a low of 10104. In case it continues to correct some more below the 10100 level, which is the deciding level for now, we hold 10000-9950 as the immediate supports. On the weekly time frame, Nifty had taken a breather in October 12 week after five consecutive downfalls and retreated again for the next two weeks as of October 12. Meanwhile, it also broke the upward sloping trendline (by joining March 4th week low and December 30th week low) at 10225. 

Hence, on the broader time frame below 9950, which is the medium-term trend reversal level, we hold 9685 as the next supports. However, the volumes were lower since the retreat from 10710 and the oscillators too are lying near the oversold zone. Hence, if Nifty bounces back from the current levels, we hold 10245, followed by 10405, as the resistances. Nifty may witness 10710- 10750 as the fresh buying levels for now. 

STOCK RECOMMENDATIONS 

TORRENT PHARMACEUTICALS ............ BUY ............ CMP Rs 1590 

BSE Code : 500420
Target 1 .... Rs 1693
Target 2 ..... Rs 1750
Stoploss....Rs 1500(CLS) 


The stock of Torrent Pharmaceuticals is currently trading at Rs 1590. Its 52-week high and low stand at Rs 1871.95/Rs 1206 made on September 7, 2018 and November 13, 2017 respectively. The stock had given a multiple resistance breakout near Rs 1470-1500 levels in August 2018 and thereby gave a sharp rally up to the 52-week high. The stock witnessed upward sloping trendline resistance by joining prior two highs of Rs 1720 and Rs 1768 and also formed a Doji at 52-week high. Thereby, the stock witnessed a fall of up to Rs 1515 level on October 19, which is its resistance-turnedsupport level where it gave a hammer-like pattern. On the weekly time frame, these levels acted as 50% retracement of the prior upward rally from Rs 1224 to Rs 1872 on a closing basis. The price also took support from just above its 200-day EMA level and bounced back. The volumes are picking up and the oscillators have reversed from the oversold zone. We recommend a BUY

SAIL........... SELL.............. CMP Rs 64.20 

BSE Code : 500113
Target 1 ..... Rs 60.60
Target 2 ..... Rs 58.40
Stoploss....Rs 69.00 (CLS) 


The stock of SAIL is currently trading at Rs 64.20. Its 52-week high/low stand at Rs 101.40/Rs 58.55, which were made as on January 8 2018 and October 23, 2017, respectively. The stock hit double top at 52-week high and tumbled up to its trendline support at Rs 77.40. The stock attempted a bounce, but faced resistance at Rs 98.35 and thereby tumbled sharply breaching the Rs 77.40 level, up to Rs 67.25. Thereafter, the stock traded with lower tops and similar bottoms. The stock broke its bottom on September 28 at Rs 69.40 with a strong bearish candle on the daily time frame supported by volume spurt and 14-period RSI negative crossover. The stock witnessed a pullback up to the trendline and retreated to trade southwards. The stock is currently trading below its major EMA levels of 20, 50, 100 and 200 days. On the weekly time frame, the stock had formed a reversal Doji in October 12 week, but it turned into a breather and gave two consecutive downticks after that. We recommend a SELL

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