Nifty can slide to 5755 - Alex Mathews

North Korea and South Korea exchanged artillery fire created tremors in the Indian stock markets, which was weak otherwise. Market opened in red in the morning due to weak global cues like concerns of spillover of Ireland's debt crisis to other European nations like Portugal and Greece, raids by U.S government agencies in the hedge fund offices, China's high inflation and their desperate moves to curb the same and domestic 2G spectrum allocation issues. Panic selling intensified by around 1 o'clock, and Nifty touched its lowest level of the day at 5824.95 down around 146 points at one time but recovered in the late afternoon trade and closed at 5934.75, down 1.25%. Europeans stocks also opened lower further added the fuel to the downward momentum. The institutional activities are low in recent days and FII have become selective because of the uncertain macroeconomic fundamentals of the world economies.

BSE Metals, Consumer Durables, Bankex and FMCG sectors closed lower by 1.79%, 1.31%, 1.28% and 1.24% respectively. The metal index was down due to China's move to curb inflation, commodity prices and gains reported on dollar index. Dollar index is looking strong and it may breach the 81 in the near term.

As the November F&O expiry nears more volatile movements can be expected on Nifty. Counters like ACC and Guj.Ambuja may witness more selling pressure, because these two stocks open interest has increased in the near month, indicative of fresh shorts. ACC has last support at Rs. 998 and Guj.Ambuja at Rs.141. Movements below these levels can cause more pressure on these stocks.

The moving average combination of 9, 50, 100 have given a sell signal which can bring down the Nifty towards 5755 in the short term. The resistance for the Nifty will be at 5944 and 5971.

Source : Equity Bulls

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