Level of 5520 and below that 5450 is now a key support range for Nifty - GEPL Capital

NIFTY continued to be in a strong bear grip fuelled by weak domestic and global cues and selling by Foreign Investors. FII patience is getting tested as the market remains in a precarious position. Any further deterioration in the political landscape of the country can trigger a huge sell off eroding significant portion of investor wealth. BSE OIL & GAS (+1.65%) and BSE AUTO (0.55%) were the best performing indices while BSE FMCG (-1.74%) and BSE CD (-0.78%) performed the worst. Sugar stocks gained significantly due to reforms in the sector. ITC lost 2.90% despite the company raising prices of cigarettes while MARUTI SUZUKI gained 7.23% on hopes that a weaker Yen would improve margins of the company since it imports auto parts from Japan. NIFTY and SENSEX ended the day with 0.39% and 0.32% losses respectively whereas for the week, the losses were 2.28% and 2.05% respectively. BSE SMALLCAP (-0.15%) and BSE MIDCAP (+0.02%) fared slightly better.

Among Asian indices, SHANGHAI COMPOSITE was closed while HANG SENG shaved off 2.87% of investor wealth as fears of a bird flu outbreak freaked out China and its adjoining nations. NIKKEI continued to celebrate with 1.58% capping its biggest 3 day rally in 2 years gaining 3.51% for the week. The Bank of Japan has promised to inject $1.4 tn into the economy in less than 2 years.

Nifty ended with a loss of 0.39% on Friday and lost more than 2 % in the entire week and concluded the week with a very bearish candle at 5553. Now it has support placed at 5520 and below that the next important support level at watch out for is placed at 5450. Our primary view is that it takes support near 5520 and bounces back. On the higher side 5600 to 5640 range. Only if it manages to cross this resistance range then it may come up till 5700 - 5750 range in the coming few sessions which would prove to be a strong resistance on a positional basis. In an alternate scenario if it is unable to respect the support of 5520 then it can further come down till 5450.

Source : Equity Bulls

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