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  Business   Market  14 May 2019  Volatility at 3-year high on profit booking

Volatility at 3-year high on profit booking

THE ASIAN AGE. | ASHWIN J PUNNEN
Published : May 14, 2019, 2:38 am IST
Updated : May 14, 2019, 2:38 am IST

The market volumes were lower than recent average as buyers stayed away amidst tense times.

The BSE Sensex closed down 372.17 points at 37,090 while the Nifty closed at 11,148, down by 130.70 points. Also, 1,826 shares declined, about 639 shares have advanced on the BSE.
 The BSE Sensex closed down 372.17 points at 37,090 while the Nifty closed at 11,148, down by 130.70 points. Also, 1,826 shares declined, about 639 shares have advanced on the BSE.

The market continued its losing spree with both the Sensex and Nifty 50, ended lower as stocks were dragged down by escalation in the US China trade tensions.

The BSE Sensex closed down 372.17 points at 37,090 while the Nifty closed at 11,148, down by 130.70 points. Also, 1,826 shares declined, about 639 shares have advanced on the BSE.

 

The top index losers were Eicher Motors, Zee Entertainment, Sun Pharma, Indiabulls Housing and Yes Bank, while gainers were Titan Company, Bharti Infratel, Tech Mahindra, HDFC and HUL.

On the sectoral front, PSU bank, pharma, metal, auto, energy and infra saw heavy selling.

The market volumes were lower than recent average as buyers stayed away amidst tense times.

India VIX closed 10.2 per cent higher at 26.5 - more than 3 year high. Oil prices fell globally in fears of slowdown post the escalation of trade tensions but were off their intraday lows.

Mustafa Nadeem, CEO, Epic Research said, "We have seen some massive profit booking in last few days and that is now followed by aggressive shorting. The sudden shift in OI from 11,500 - 11,700 is now seen to 11,000 - 11,400. This is the volatility that we are seeing in the market. And for sure we believe traders may hurt their capital if not traded with proper stop loss or at least with a hedge."

 

"We believe the damage is done. Any pullback or recovery will be short-lived as the breadth is completely absent. We maintain our sell in advance for lower targets of 11,050," he further said.

Technical View

With the Nifty moving down further, the short term trend remains down. The Nifty could now head towards the next major supports of 11,024, which corresponds to the 200-day EMA. Any pullback rallies could find resistance at 11,300.

Sameet Chavan Chief Analyst-Technical and Derivatives, Angel Broking said, "We were looking at a strong support zone around 11,250 – 11,200. With Monday's tail end correction, this support has now been violated with ease. Now, the final ray of hope is around 11,100 – 11,050, which is a combination of 61.8 per cent retracement as well as the '200-SMA' on daily chart. Let see how market reacts around it and respects this sheet anchor or not. At present, momentum traders are advised to remain light and should avoid trading aggressively."

 

Although, the picture has not been rosy for investors, we still believe that this decline is providing an opportunity for those who are willing to build their portfolios. Hence, better to be prepared with the list of marquee propositions and should ideally start accumulating in a staggered manner, experts said.

Market View

Jayant Manglik, President — Retail Distribution, Religare Broking said, "The markets are currently facing headwinds from both local and global front. The Nifty has slipped below the crucial support of 11,200 and now the next support exist around 11,000. Considering the volatility, we suggest preferring options strategies instead of naked trades in future segment. Also, keeping close eyes on global markets and earnings season for cues."

 

Tags: bse sensex, nifty, us china trade