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600 points down in 4 session: Is there

more pain ahead for D-St?


By Kshitij Anand, ECONOMICTIMES.COM | 14 Jun, 2016, 10.10AM IST

NEW DELHI: The tug of war between the bulls and the bears has just turned fierce ahead of key
global events such as us Federal Reserve policy review and the Brexit vote. The S&P BSE
Sensex has plunged by 612 points in a matter of four sessions after hitting Mt 27K last week.
The S&P BSE Sensex reclaimed mount 27,000 last week for the first time since October 28.
The Bollinger Bands shows the index is trading close to its 20-day moving average, which is
placed at 26,300, which is also known as the middle band. If the index closes below this level,
there is a high probability that it will drift towards its lower Bollinger Band placed at 25,072.
"The benchmark Nifty has corrected by 100 points on the first trading day of the week
and ahead of US Fed event starting Tuesday. It appears to be a shallow correction, which
should terminate somewhere between 7,950 and 8,000. The Sensex equivalent for the
same would be around 26,000," Vinit Pagaria, Senior VP - Investment Strategies
at Microsec Capital, told ETMarkets.com.
"A recovery from these levels is likely to kick off the next leg of the bull run and the
Nifty50 should move higher to the 8,650 level followed by the 9,100 level by the end of the
calendar year. In the short term, the narrow move between 8,000 and 8,300 levels appears
more likely," he said.
The Nifty50 slipped below its crucial support level at 8,100. If the index fails to reclaim this level
over the next two to three sessions, a further move towards the 7,950-8,000 levels is a
possibility.
The benchmark indices are also trading around their crucial support levels and a bounceback
cannot be ruled out. Traders should remain cautious before taking positions and trade with strict
stop losses.
"Stock markets are nervous ahead of global events like Fed meeting and Brexit vote. They are
witnessing healthy corrections, which should attract fresh buying at lower levels, preferably
around the 8,000 mark," Mazhar Mohammad, Chief Strategist - Technical Research & Trading
Advisory, Chartviewindia.in, told ETMarkets.com.
"This correction is not going to alter the medium-term and long-term trends, which remains
intact with an upward biased. We recommend selective positional buying in scrips that have hit
new lifetime highs recently and add them to your portfolio if the Market slips further towards the

7,950 level," he said.


If traders are interested in taking positional calls, they can do so by keeping strict stop losses on
their trades to avoid getting caught on the wrong side.
ETMarkets.com collated data of 30 stocks in the S&P BSE Sensex. The R1, R2, and R3 levels
talk about resistance levels, which the stocks will face on the upside, while S1, S2, and S3 are
key support levels if the stocks drift lower.

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