The markets ended the week on a weak note. Selling pressure erased early gains and the markets closed deep in the red. Nifty closed at 4,949 down 77 points, while the Sensex shut shop at 16,650 down 257 points.
E Mathew, Director, Mathew Easow Fiscal Services said, “We are just clutching on to the last straws and it is important that we close above the higher bottom formation, which is at 4,950 actually. It is important that we close above that level. It is essential that we do not create an intra-day low below 4,913. This uptrend would certainly be vitiated if your stop loss unfortunately is around 4,800. Below 4,800, one can just forget about this uptrend. But there is still a glimmer of hope if we close above 4,950. During this week, we had so many negative factors from crude to inflation figures, etc. The market is taking a toll on the technicals as well. Bull markets are born amidst a tremendous fear and they thrive on pessimism. So let us hope that this is part of that”, he stated.
E Matthew is negative on Reliance Capital and ITC.
Here's how E Matthew views the stocks on board:
On ITC:
ITC has been one of the biggest culprits for the fall. Yesterday’s closing was at Rs 223. By Monday, it will possibly head towards a 10% fall. If ITC closes decisively below Rs 213 today, it has the potential of going down to as low as Rs 202.
On Cairn:
Cairn is not looking so weak. It is a profit-taking stock and has run up substantially. In this correction, one should deem it as normal. If Cairn comes down as low as Rs 292-295, that should not be taken as a sign of weakness. But, all these moments have their impact on the Nifty.
On Reliance Capital:
This stock is not looking as weak as some of its peers from the same sector. But it is not clear what sort of a trading stop loss one would keep on this stock. The nearest support looks like Rs 1,260. So, with that sort of a strong support zone, a buy would not be initiated but may be on declines one could look at this with a very tight stop loss of around Rs 1,250 or Rs 1,260. As of now, its best to avoid this. Those who are holding this stock may sell out now and try to repurchase it.
Disclosures: It is safe to assume that I may be discussing stocks in which my associate company or clients may have trading positions.
Source: Moneycontrol.com
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