Although analysts are not ruling out a brief rebound as stocks could be oversold after the seven-day losing streak – the longest selling spree since mid-June – sentiment remains negative with the Nifty closing below main long-term trend indicators.
Nifty fell 40.50 points or 0.24% to end at 16,818.10. The BSE Sensex closed at 56,409.96, down 188.32 points or 0.33% from the previous close. Both indexes had climbed as much as 1% earlier in the day, but the rebound fizzled out midway through the session and ended lower.
The Nifty closed steadily below the 21-day exponential moving average (EMA) of 17,416 and the 200-day EMA of 16,882, said Viraj Vyas, derivatives and technical analyst-institutional equities at Ashika Group. “The index continues to spend more time below the 200-day EMA; it will continue to witness more weakness,” Vyas said.
When a stock or index consistently closes below long-term moving averages like the 200-EMA, it is considered bearish and vice versa.
About 78% of current-month Nifty futures have rolled over to the October series, compared to a three-month average of 79%, according to preliminary data.
Rollover cost stood at 0.19%, indicating that the bulls were missing the action.
“Weakness in global sentiment will continue to rule the mood in the near term, but various technical indicators show an oversold trend,” Chandan said.
, head of technical research and derivatives at . “In nine of the last 10 years, an October streak has given a positive close and we hope to see a rebound.”
Slightly lower October contract accumulation so far could be due to indecision ahead of the Reserve
political meeting on Friday.
“A clear trend will emerge later next week following key data and events such as RBI policy or FTSE rebalancing,” Taparia said.
As the Nifty struggles to break above long-term moving averages, traders are refraining from creating bullish positions, analysts said. At the same time, they are reluctant to mount aggressive bearish bets with key indices extending losses to the seventh straight day on Thursday. The string of losses has many market participants believing that stocks may be oversold.
In the last seven sessions, the Nifty has lost more than 7%.
Foreign portfolio investors remained net sellers in the cash segment at ₹3,599.42 crore on Thursday, according to preliminary exchange data. In the past seven sessions, they have sold Indian stocks worth more than ₹18,950 crore, according to the data.
Analysts expect the Nifty to trade between 16,600 and 17,300 in the near term.
If the Nifty manages to breach the 17,200-17,300 mark, traders could build new bullish bets, Taparia said.
If Nifty breaks through 16,600 levels, it could test 16,400 to 16,300 levels up to 16,000 levels, he said. This implies a decline of around 11-12% from the September 15 highs.
Bank Nifty futures turnover through October was around 82%, compared to a three-month average of 84.3%.
Traders created bullish bets on capital goods, automotive information technology and healthcare. They were cautious on PSU banks and NBFC stock futures.
On Thursday, major Asian indices were mixed while European indices traded in the red, with Britain’s FTSE100, France’s CAC and Germany’s DAX down in the range of 1.1-1.5%. The pan-European stock market benchmark Stoxx 600 was down 1.45% at press time.
Although analysts are not ruling out a brief rebound as stocks could be oversold after the seven-day losing streak – the longest selling spree since mid-June – sentiment remains negative with the Nifty closing below main long-term trend indicators.
Nifty fell 40.50 points or 0.24% to end at 16,818.10. The BSE Sensex closed at 56,409.96, down 188.32 points or 0.33% from the previous close. Both indexes had climbed as much as 1% earlier in the day, but the rebound fizzled out midway through the session and ended lower.
The Nifty closed steadily below the 21-day exponential moving average (EMA) of 17,416 and the 200-day EMA of 16,882, said Viraj Vyas, derivatives and technical analyst-institutional equities at Ashika Group. “The index continues to spend more time below the 200-day EMA; it will continue to witness more weakness,” Vyas said.
When a stock or index consistently closes below long-term moving averages like the 200-EMA, it is considered bearish and vice versa.
About 78% of current-month Nifty futures have rolled over to the October series, compared to a three-month average of 79%, according to preliminary data.
Rollover cost stood at 0.19%, indicating that the bulls were missing the action.
“Weakness in global sentiment will continue to rule the mood in the near term, but various technical indicators show an oversold trend,” Chandan said.
, head of technical research and derivatives at . “In nine of the last 10 years, an October streak has given a positive close and we hope to see a rebound.”
Slightly lower October contract accumulation so far could be due to indecision ahead of the Reserve
political meeting on Friday.
“A clear trend will emerge later next week following key data and events such as RBI policy or FTSE rebalancing,” Taparia said.
As the Nifty struggles to break above long-term moving averages, traders are refraining from creating bullish positions, analysts said. At the same time, they are reluctant to mount aggressive bearish bets with key indices extending losses to the seventh straight day on Thursday. The string of losses has many market participants believing that stocks may be oversold.
In the last seven sessions, the Nifty has lost more than 7%.
Foreign portfolio investors remained net sellers in the cash segment at ₹3,599.42 crore on Thursday, according to preliminary exchange data. In the past seven sessions, they have sold Indian stocks worth more than ₹18,950 crore, according to the data.
Analysts expect the Nifty to trade between 16,600 and 17,300 in the near term.
If the Nifty manages to breach the 17,200-17,300 mark, traders could build new bullish bets, Taparia said.
If Nifty breaks through 16,600 levels, it could test 16,400 to 16,300 levels up to 16,000 levels, he said. This implies a decline of around 11-12% from the September 15 highs.
Bank Nifty futures turnover through October was around 82%, compared to a three-month average of 84.3%.
Traders created bullish bets on capital goods, automotive information technology and healthcare. They were cautious on PSU banks and NBFC stock futures.
On Thursday, major Asian indices were mixed while European indices traded in the red, with Britain’s FTSE100, France’s CAC and Germany’s DAX down in the range of 1.1-1.5%. The pan-European stock market benchmark Stoxx 600 was down 1.45% at press time.