In a choppy session today on Dalal St, the last hour jitters returned to haunt the investors and the markets slipped significantly. The Nifty closed at 5,616 down 81 points, while Sensex shut shop at 18,939 down 189 points.
The weakness in markets was inline with Asian indices trading flat or negative despite some positive cues from the Dow yesterday.
A Merrill Lynch report on the market says that they expect a consolidation before the final bubble phase. They say that fair value of Sensex is close to about 16,000. That is the 2008 target.
Rahul Mohindar of viratechindia.com believes the last half hour of volatility today indicates that the market has broken important support level today. He said, "That’s 5,650, so for shorter-term traders, someone who is trying to trade the next week or two weeks off for the next series, he is going to try and remain short. There is a very important support level punctured, which could bring in some weakness in the shorter-term. So again there is a lot of clarity, which is awaited in terms of levels being broken down, but the call is clear that either one stays short or stays out."
Sushil Kedia, Head- Institutional Equities, K&A Securities said that 5,640 and 5,840 are two important fulcrums on the Nifty. According to him, chances are that 5,640 will break on the downside in the next few sessions. Kedia advises investors to initiate a downside on the Nifty from here. “If the Nifty falls below 5,640 it may test 5,320 levels,” Kedia said, adding that until the Nifty moves beyong 5,840, there will be a downward bias.
Source: Moneycontrol.com
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