Weak global cues pushed the benchmark indices in the red in the last hour of the session on July 26. The Sensex closed 123 points lower at 52,852, while the Nifty was down 31 points at 15,824.
China and Hong Kong shares to their lowest this year, as investors worried over government regulations battered stocks in the education, property, and tech sectors, a Reuters report said.
“Indian market swung between gains and losses in today’s volatile trade, reflecting weak global peers as investors await a slew of quarterly earnings. Chinese education, property, and tech sector fell sharply after tighter government regulations,” Vinod Nair, Head of Research at Geojit Financial Services, said.
“Globally, markets are awaiting the upcoming Fed meeting this week to have clarity regarding the timing of asset purchase tapering.”
Sectorally, selling pressure was seen in energy, realty, power, auto, and telecom, while buying was seen in consumer durables, healthcare, metals, and IT.
On the broader markets front, the BSE midcap index closed flat, while the smallcap index ended with gains of 0.3 percent.
India VIX moved up by 5.87 percent from 11.76 to 12.45 levels. Spike in volatility led to some profit-booking but overall, lower volatility indicates that buying interest could emerge again at any meaningful declines, experts said.
On the options front, the maximum Put OI is placed at 15,800 followed by 15,000 strikes, while the maximum Call OI is placed at 16,000 followed by 15,900 strikes. Options data suggests a broader trading range in between 15,700 and 16,000 zones.
Here’s what experts suggest investors should do on July 26:
Expert: Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services
The Nifty moved in a range of 100 points throughout the day and respected its immediate support zones but it failed to cross the previous day’s high, indicating that follow-up is missing at higher zones.
The index formed a bearish candle and an Inside Bar on the daily scale and continued to form higher lows from the last two sessions.
Now, the Nifty has to hold above 15,800 to witness an up move towards 15,962 and 16,000, while on the downside, support exists at 15,750 and 15,700.
Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
Benchmark indices remained in the tight trading range and neither the crucial level of 15,900/53,100 was broken nor the 15,750/52,650 level threatened, mainly due to substantial pressure of the rollovers of the longest expiry.
Participants are also awaiting the outcome of the US Fed’s meeting due on July 27-28, which would also have a lot of significance for local markets.
The index formed an “inside body” formation, which is a sign of indecisiveness and to show any trending move on July 27, the market has to break either the upward or lower boundary.
On the downside, supports are placed at 15,750 for the Nifty, and 52,650 for the Sensex. A close below 15,750 and52,650 can see the Nifty and the Sensex decline to 15,650 and 15,2300, respectively.
Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas
The Nifty traded in a narrow range on July 26 and formed an Inside Bar on the daily chart. The recent structure shows that the index had taken support near the junction of the 40-day EMA & daily lower Bollinger Band and took a leap towards the upper end of the consolidation.
For the last couple of sessions, 15,900 is acting as a barrier for the index, keeping the rise in check. On the downside, 15,800-15,750 is an immediate support zone for the Nifty.
The hourly Bollinger Bands are contracting again, which shows that the index is likely to witness further consolidation. Overall, the ongoing short-term consolidation is providing multiple opportunities of staggered buying for positional traders.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The Nifty started the week on a tepid note as it remained range-bound with lacklustre volumes. While 15,600 is now short-term support, 15,400 is a good medium-term support.
The level of 15,900 on the Nifty is a stiff resistance and we have witnessed severe selling pressure around that level. Until we get past either of the two, the index will continue to vacillate between 15,400 and 15,900.
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