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Market Report

Monday, 08-Dec-2014

NSE

  • The BSE Sensex finally closed 338.70 points, or -1.19 per cent, lower at 28,119.40 today. It hit a low of 28,097.12 and a high of 28494.85 in intraday trade. The 50-share Nifty index closed below its crucial psychological support level of 8500 at 8,438.25 which is down 100.05 points, or -1.17 per cent, lower from last Friday's closing weighed down by selling pressure in Infosys after four co-founders sold part of their stake in the IT major.

  • The Indian markets underperformed other Asian peers as profit booking extended for the second straight session in a row. The 50-share Nifty index slipped below its crucial psychological level of 8500 and also broke below its 20-DMA placed at 8452 levels. Another factor highlighted by experts is the fact that December is generally seen as a slow month given the fact that most of the key events are already over. There is not much on domestic or global front which will aide trading activity, but the overall positive trend still remains intact.

  • Point to note is the heavy participation by foreign investors today. See our 'Market Statistics' page. The real reason behind such heavy buying, or the implications and effects it will have in tomorrow's trade, is not very clear at this point of time.

  • There will be lower activity in December, but it's also the time when price magnification appears more amplified, says Vineet Bhatnagar of PhillipCapital. Also, considering the fact that it is a quarter for many managers to print their NAVs, I do not think December should close at a lower Nifty level than what we saw in November. However, at the same time, I also think that the Nifty looks very tightly range-bound in the mid-term. If you look at the way the F&O distribution is panning out, you will see that calls are concentrated at 8600-8700. So, it is a very tight range that we are looking at, he adds.

  • Nifty might head towards levels of 8180-8200, says Mitesh Thacker. I am still waiting for 8400 to be taken out decisively. But I do expect that once it happens, the Nifty might head towards levels of 8180-8200. So it is time to possibly now start cutting down on long exposure using bounce backs to sell and exit and even explore short positions, he says.

  • Correction to continue for a few more days, says Ashwani Gujral. Given the fact that we were down 90-100 points, it is not a sharp correction which tells you that this could be a 5 per cent type correction. Nothing really serious but chances are this could continue for a few days. I would be looking at 8,150-8,200 type of zone to possibly restart buying. Till then you just hang on. The banks need to correct quite a bit. So around those levels, IT and banks would have corrected enough for the next rally up, he adds.

NIFTY 3-Month

(Data/Charts courtesy NSEI/Yahoo!/iCharts/The Economic Times)