Market recovers early losses, but Nifty fails to conquer 11,300

Indian market slipped in the red for the second day in a row on September 9. Nifty50 rallied nearly 100 points from the lows but failed to close above 11,300 levels while the S&P BSE Sensex reclaimed 38000 towards the close.

Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 171 points to 38,193 while the Nifty50 was down 39 points to close at 11,278.

The Nifty50 is stuck in a range where 11250 is providing support while on the upside 11350-11400 are proving to be tough resistance levels for the index.

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On the technical charts, the Supertrend indicator gave a sell signal which suggests that more downside could be in the offing.

The last time when the indicator triggered a sell signal was back in the month of May. The Nifty hit a low of 8800 before bouncing back.

Muted global cues as well as uncertainty on the border front with China is something which is keeping traders at bay. But, recovery in the second half of the trading session suggests that bulls still have fighting power.

“After opening with losses and drifting lower, the benchmark indices recovered towards the latter half of trading but still ended the day with losses. With Asian markets all ending in losses, the slight recovery seen in the Indian markets mirrored with the positive opening in the European markets,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.

“A sell-off in US tech stocks and a setback to one of the vaccine trials kept markets on edge. Indian markets are expected to be in sync with the global markets and also react to the on-going border tensions with China. There are currently no fresh triggers for the market and we can expect volatility,” he said.

On the sectoral front, some action was seen in energy, metals, healthcare, and telecom while selling pressure was seen in banks, the public sector, and realty stocks.

On the broader markets front – the S&P BSE Mid-cap index was down 0.2 percent while the S&P BSE Small-cap index fell nearly 1 percent.

Top Nifty gainers include names like Cipla, Tata Steel, and ZEE Entertainment.

Top Nifty losers include names like Axis Bank, Bajaj Finserv, GAIL India, and SBI.

Stocks & Sectors:

On the sectoral front, the S&P BSE Energy index was up 1.7 percent, followed by the S&P BSE Metal index gained 1.2 percent, and the S&P BSE Healthcare index was up 1.09 percent.

Selling pressure was seen in Bankex that was down 2.1 percent, followed by the S&P BSE Public Sector that fell 2.02 percent, and the S&P BSE Realty index was down 1.5 percent.

Volume spike of more than 100% was seen in Power Grid, Tata Steel, Berger Paints, and Vedanta.

Long Buildup was seen in stocks like Tata Steel, Hindalco, and Escorts.

Short Buildup was seen in stocks like Apollo Hospitals, Bajaj Finserv, and IDFC First Bank.

More than 100 stocks on the BSE hit a fresh 52-week high that include names like Tata Elxsi, Adani Green, and DFM Foods.

Technical View:

Nifty formed a bullish candle on the daily charts as the closing level was higher than the opening level

Today’s price action suggests that some sort of stability in the next session and can pave the way for short covering in the next session

In that scenario sustaining above 11300 levels, the index can be expected to rally towards the zone of 11350 – 380 levels.

“If the index faces resistance above 11300 and fails to sustain above that level then it shall remain sideways with a negative bias,” Mazhar Mohammad of Chartviewindia.in said.

“For next session, it looks prudent on the part of short term traders to remain on sidelines whereas intraday traders can consider shorting below 11250 levels for a modest target of 11190,” he added.

He further added that in case if the index breaches 11185 levels then selling shall be resumed with target of 11060 levels.

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