Indian markets winning run ended after four days on May 11 on weak global cues, but in a positive sign, the Nifty managed to hold on to 14,800 on a closing basis.
The Nifty ended the day at 14,850, down 91 points, while the Sensex closed 340 points lower at 49,161.
Sectorally, buying was seen in utilities, oil & gas, public sector, power, and infrastructure stocks, while selling was seen in metals, finance, banks, and IT stocks.
The S&P BSE midcap index rose 0.6 percent and the smallcap index closed with gains of 0.8 percent—outperforming the benchmark indices.
“Markets reacted to the global fear of a rise in inflation, which might trigger the rate hike earlier than anticipated. On the benchmark front, the Nifty has been struggling to cross 15,000 mark for the last two months and is witnessing the slide again after reaching almost to that zone,” Ajit Mishra, VP-Research, Religare Broking Ltd said.
The downside could be capped this time due to the existence of support at around 14,600. Participants, however, should limit leveraged positions and focus on stock selection and risk management, he said.
Here is what experts say investors should do on May 12:
Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited
The Nifty opened gap down below 14,800 on account of weak global cues but then bulls took charge to take the index towards 14,900.
The index formed a bullish candle on the daily scale but negated its formation of higher lows of the last five sessions and closed the day with a loss of around 91 points.
Now, it has to hold above 14,800 to witness an up move towards 15,000 and 15,050, while on the downside, support exists at 14,700 and 14,600.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.
With the recent bounce, the Nifty reached a crucial hurdle zone of 15,000-15,050. A falling trendline, the daily upper Bollinger Band and a key swing high are all present in this zone.
These parameters pushed the index in a consolidation mode. As a result, the Nifty opened with a significant gap on the downside but found support near the crucial hourly moving averages and traded there throughout the day.
On the downside, the junction of 40-hour exponential moving average, hourly lower Bollinger Band and lower end of the reverse rising channel ie 14,770-14,750 is the immediate support zone.
A dip towards this support zone can be taken as a fresh buying opportunity. The overall outlook continues to be positive and once the consolidation is over, the index is expected to eventually breakout out of the 15,000-15,050 barrier.
Rohit Singre, Senior Technical Analyst, LKP Securities
The index opened gap down but managed to hold its bullish stream since the start of the day and closed at 14,851 with a loss of nearly a percent.
The index has a stiff hurdle on the higher side near the 14,900-15,000 zone, and any daily close above the 15,000-mark can only activate the overall bullish stream.
We may again see selling pressure from the higher end. Support is seen near 14,775-14,700. If the index holds above the said level, it will be a positive.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
Technically, on the intraday charts, the market has formed a lower top kind of formation but at the same time, the Nifty took the support near its 50-day SMA, which is broadly positive for the market.
We are of the view that after a strong uptrend, bulls may prefer to take a temporary pause near 14,950/49,500 and because of weak global market conditions, the market is likely to consolidate between 14,750 and 14,900.
For the day traders, 14,900 would be the key level to watch out for. Above it, we can expect the continuation of uptrend wave up to 14,965-15,000.
If the Nifty trades below 14800, it can trigger one more leg of correction till 14,750.
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