After The Bell: Nifty below 15,150, what should investors do on Friday?

Market Outlook

The Indian market consolidated for a third day in a row on February 18, pushing benchmark indices below crucial support levels. The S&P BSE Sensex closed with a loss of nearly 400 points, while the Nifty50 ended below 15,150.

The Sensex fell 379 points to 51,324, while the Nifty50 closed 90 points lower at 15,118.

Sectorally, the action was seen in oil & gas, utilities, public sector, power, and metal while profit booking was seen in auto, banks, finance, healthcare, realty, and telecom.

“Market remained in the mood for consolidation for the third day, impacted by negative cues from Asian markets,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol. Globally, markets were showing weakness due to spike in US bond yield, though improved corporate earnings and inflow of foreign funds was providing support to the domestic market, he said.

“The bearish rally in the market was led by private banks and auto stocks, while PSU banks continued their outperformance on hopes of privatisation,” he said.

Here is what experts say investors should do on February 19:

S Ranganathan, Head of Research at LKP Securities

While Indices ended in the red on February 18, the under ownership in PSU stocks was evident also, as several of them across sectors posted smart gains.

The PSU bank index that rose 6 percent the previous day recorded huge gains for the second day in a row on privatisation hopes. In the broader market, non-life insurers and paper stocks saw keen interest among investors.

Binod Modi, Head Strategy at Reliance Securities

The third-quarter earnings have been quite encouraging and a large number of companies succeeded to top estimates.

We continue to maintain our positive stance on equity from llong-term perspective, a rotational trade can be visible, wherein sectors, which are expected to be major beneficiaries of higher capex, are likely to outperform.

Further, mid and smallcap stocks are likely to remain in focus led by improved earning visibility and valuations gap.

Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited

Indian stock indices turned negative, with the Sensex and the Nifty trading with notable losses. Domestic optimism was influenced by pessimistic hints from other Asian markets.

The Nifty is trading around 15,110 after trading in the 15,250-15,084 range.

Traders are advised to refrain from building a new buying position until there is further improvement and a breakout of 15,370.

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

The Nifty index opened flat and has been facing weakness for the last three trading sessions. The index failed to surpass 15,250 and drifted towards 15,080 levels. It remained negative to range-bound for the most part of the session and closed the day with the losses of around 90 points.

The Nifty formed a bearish candle on the daily scale and continued its formation of lower highs-lower lows of the last two trading sessions.

Now, the index has to cross and hold above 15,150 to get stability and an upmove towards 15,400-15,500 zone, while on the downside, major support is seen around 15,000 and 14,900 zones.

Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas

The Nifty witnessed selling pressure for the third consecutive session. On the hourly chart, it breached the junction of the 40-hour exponential moving average and the hourly lower Bollinger Band, which is a crucial near-term support zone.

This is a sign of weakness in the near term. Also, the daily momentum indicator has turned in the favour of the bears. Thus, the index seems to have stepped into a consolidation phase. The levels of 15,000–15,430 will be the range for the consolidation.

However, if 15,000 is breached on a closing basis, the index is in for a deeper correction.

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