Sensex down 6.5% from all-time high, Nifty holds above 13,800 as bears continue to haunt Dalal Street

Stock markets have closed in red for the fifth day running.

For the fifth consecutive day Sensex and Nifty have closed deep in red. Now S&P BSE Sensex sits at 46,874, down 6.5% from its all-time high of 50,184. Nifty 50 closed the day at 13,821. Broader markets closed in red. India VIX or the volatility gauge zoomed to breach 25 levels earlier in the day only to end with losses. Among sectoral indices, Nifty Bank, Nifty Private Bank, and Nifty Media ended with gains. Axis Bank was the top Sensex gainer, zooming 6%, followed by State Bank of India, ICICI Bank, and ONGC. HUL, Maruti Suzuki India, and HDFC Bank were the top drags. 

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities –

“Today, on the big support of the 50-day SMA, the market has established a long-led dodge, indicating that the market has taken a break after falling below the high of 14750/50185. Based on this, the market may either continue the rally going southward or it may turn back. In short, the market would return to trending mode in the next day or two. On the upside, 13930/47000 would be a big hurdle and support would be at the 13680/46500 level. If the Nifty / Sensex closes above or below the given level, it would move up to 400 to 500 points on either side.”

Vinod Nair, Head of Research at Geojit Financial Services –

“Market turned cautious after the unidirectional upside of the last 10 months due to ambiguity ahead the budget and profit booking in the global market due to over-enthusiasm. Global risk parameters increased despite the US Fed maintaining its supportive policy, due to high speculation in the equity market and likely drop in fiscal & monetary liquidity, in the future.”

Manish Shah, Founder, Niftytriggers

“The pattern in play is a “Doji” and this pattern could act as reversal considering its location and context. Let’s talk about location. The 50 Day SMA is at 13728 and day’s low in Nifty was at 13712. Secondly, the 61.8 per cent retracement is at 13747 and there is a gap at 13771-13810. A trendline is drawn from the lows of March 23 to succeeding lows also touches the price. Thus we have multiple levels of support hitting the index at the support zone of 13750-13660.  A Doji with long lower shadow is a sign that sellers may be taking a pause.”

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments –

“13700 has acted as a good support for the market. What needs to be seen is if we can keep above this level over the next few days. If we break 13700, we could slide down to 13500-13600 and then to 13200. On the upside, we have a stiff resistance at 14500 and only if we can close above that can we start thinking on the long side and accumulate buy positions.”

Rohit Singre, Senior Technical Analyst at LKP Securities –

“Index closed a day on a negative note for fifth consecutive session at 13825 with loss of one per cent and formed a Doji candle pattern on the daily chart which suggest some reversal may be expected in coming sessions. The index has formed a good base near 13800-13700 zone if managed to hold above-said levels then we may see a swift pullback in nifty towards 13900-14000 zone which is immediate hurdle on higher side.”

Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS –

“For the day, Nifty formed a ‘Doji’ candle. The appearance of a Doji following four consecutive tall, bearish candles indicates that we may see some sort of consolidation/short covering tomorrow, if the index manages to hold above today’s low. That said, with just one trading session left until the Union Budget on February 1st, volatility could remain elevated over the next few sessions. Hence, heading into the event, it is advisable to remain light and avoid bottom fishing, until the markets show some signs of bottoming.”