 "Stock market outlook: Here's why Sensex, Nifty can fall up to 3% in Sept")
The Indian equity market were witnessing profit-taking in trades on Wednesday tracking weak cues from global peers, as investors await for further cues on the likely size of interest rate cut in the US this September.
Overnight, the US market logged their biggest single-day fall in a month, with NASDAQ tumbling 3.3 per cent, the S&P 500 2.1 per cent and Dow Jones 1.5 per cent. Near home, as of 10 AM; Japan's Nikkei had shed 3.7 per cent. Hang Seng was down 1 per cent and China's Shanghai Composite index declined 0.5 per cent.
Back home, the BSE Sensex slipped 0.9 per cent to a low of 81,834 in today's opening deals. The BSE Sensex index thereafter was seen quoting with a loss of 0.6 per cent or 465 points at 82,060 levels.
The NSE Nifty, meanwhile, tumbled to a low of 25,084, and was seen hovering around 25,130 levels - down 0.6 per cent.
Among sectoral indices, the Nifty PSU Bank was the chief loser, down 1.5 per cent it was closely followed by the Nifty IT index down 1.3 per cent. Among other key indices - the Nifty Metal, Bank Nifty and Nifty Energy shed around 0.5 per cent each.
BSE Sensex
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Current Level: 82,100
Downside Risk: 2.9%
Support: 81,340; 80,700; 80,200
Resistance: 82,635; 82,725
Technically, there is one key factor going against the Sensex at the moment - i.e. although it is still early days, the open and high for the BSE benchmark index for September month is the same at 82,725. In general, this is considered as a negative sign.
So unless and until, the BSE Sensex does not clear this resistance, the bias for the month of September could be tepid. Having said that, on the quarterly Fibonacci chart, the Sensex seems to have cleared the R-1 (Resistance) at 82,635. Thus, suggesting a likely positive bias for this quarter.
To sum it up, the BSE Sensex will need to cross the 82,725 resistance for fresh gains. On the upside, the BSE index can potentially rally to 83,750 and 84,865 in the short-term. On the flip side, failure to clear the hurdle, could weigh on the Sensex. As such, support for the BSE index can be expected around 81,340, 80,700, 80,200 and 79,700 levels.
Nifty
Current Level: 25,135
Downside Risk: 2.2%
Support: 25,030; 24,875; 24,735
Resistance: 25,235; 25,280; 25,300
In case of Nifty, the NSE benchmark had seen formation of a 'Hanging Man' structure on the monthly chart in August. This candlestick pattern after a rally tends to signal a potential reversal. As such, the Nifty could be prone to selling pressure at higher levels.
The key bullish pivot for the Nifty this month stands at 25,030, as long as the index is able to sustain above it, the index may look to negate the possible bearish reversal. However, break and sustained trade below 25,030 levels can trigger a likely price correction.
In the last 14 trading sessions, the NSE Nifty had rallied nearly 5 per cent or 1,200 points at its peak of 25,334. As per the retracement theory, the Nifty could seek support around its 38.2 per cent retracement, which indicates a likely downside target at 24,875; below which the index can potentially slip to 24,735 and 24,595 levels.
On the chart, resistance for the Nifty is now visible at 25,235, 25,280 and 25,300 levels.
Bank Nifty
Current Level: 51,345
Downside Risk: 3.2%
Support: 50,786; 50,450; 50,200
Resistance: 51,524; 51,935
The Bank Nifty was seen attempting to conquer its 50-DMA (Daily Moving Average) in recent days. Yesterday, the Bank Nifty closed above the 50-DMA for the first-time after a month. The index, however, is seen quoting below its 50-DMA, which now stands at 51,524, in today's trading session.
The daily chart suggests likely resistance for the Bank Nifty at 51,524 and 51,935 levels. The index is likely to trade with a tepid bias until these hurdles are conquered. On the downside, near support for the Bank Nifty lies at 50,786 - its 20-DMA and 50,450 its 20-WMA (Weekly Moving Average. Below which, the Bank Nifty can potentially fall to 49,720 levels, with interim support visible at 50,200 levels.
Nifty PSU Bank
Current Level: 6,871
Downside Risk: 7.2%
Support: 6,790; 6,700
Resistance: 6,945; 7,200
The Nifty PSU Bank index is seen struggling around its 20-DMA for the last few weeks. Further, the chart shows that the index is seen trapped in a congestion zone, with resistance around its 100-DMA and key support at its 200-DMA.
These two key moving averages indicate a broad trading band of 6,700 - 7,200 for the PSU Bank index; with interim support seen at 6,790 and resistance at 6,945 levels. A breakout from this trading band is likely to unveil the next trend on the index.
For now, the bias seems slightly in favour of the bears, with a downside risk up to 6,380.
Nifty IT
Current Level: 42,175
Downside Risk: 6.1%
Support: 41,425; 41,080
Resistance: 42,300; 42,750
The Nifty IT index has shed almost 3 per cent in the last three trading sessions from its peak of 43,300 registered on September 02. The index seems on course to test support around its super trend line on the daily scale at 41,425 levels, which near about coincides with the 20-DMA at 41,080 levels.
Break and sustained trade below these two levels, can trigger an extended fall towards the 50-DMA at 39,600 levels. On the upside, the index is expected to face resistance around 42,300 and 42,750 levels.
Nifty Metal
Current Level: 9,157
Downside Risk: 5.9%
Support: 8,850
Resistance: 9,205; 9,435; 9,525
Since late August, the Nifty Metal index repeatedly faced resistance around its 50-DMA, which now stands at 9,435 levels. Today, the index has slipped below its 20-DMA for the first-time since August 19. The 20-DMA stands at 9,205. The index has been trading with a negative bias since the breakdown in mid-July.
The chart suggests that the overall bias is likely to remain tepid as long as the Metal index remains below 9,525 levels. On the downside, the index may look to re-test support around its lower-end of the Bollinger Bands on the daily scale at 8,850 levels; below which the major support stands at 8,620 in the form of 200-DMA.
Nifty FMCG
Current Level: 63,380
Downside Risk: 3.8%
Support: 62,690; 61,700; 61,250
Resistance: 63,530; 64,150
Amid today's market fall the Nifty FMCG index is seen outperforming having recovered most of the day's losses. Technically, the FMCG index took support at its 20-DMA, which stands at 62,690 levels, and then bounced back. The intra-day low was 62,906.
The long-term chart suggests, that for a positive bias the Nifty FMCG index needs to sustain above 63,530 levels on a consistent basis; above which the index can potentially rally to 64,570 levels, with interim resistance seen at 64,150 levels.
However, in case, the FMCG index starts trading consistently below 63,530 levels, then the index could witness some weakness in the near-term. As such, the 20-DMA support shall act as an immediate support; below which a fall 61,700, 61,250 and 61,000 seems likely.