Indian Benchmark indices witnessed selling after hitting fresh high. Strong selling was seen in Metal, Realty and FMCG stocks while buying is witnessed in IT stocks.
The benchmark indices closed lower on Tuesday (October 19). The Sensex was down 49.54 points or 0.08 percent at 61,716.05. The broader Nifty was down 58.20 points or 0.31 percent at 18418.80. About 959 shares have advanced, 2321 shares declined, and 122 shares are unchanged.
Gaurav Udani, CEO & Founder, ThincRedBlu Securities, said, "After making a new life time high of 18,604 , the Nifty saw some profit booking and closed at 18422 , negative by 55 points since yesterdays close. On daily charts Nifty has made a bearish pattern and charts are suggesting that the correction in Nifty may continue in the next few trading sessions. Nifty has support at 18350 and 18,225 levels. Nifty will face resistance in 18480 to 18,530 range. Traders are suggested book profits and keep strict stoploss in the current markets."
Mohit Nigam, Head-PMS, Hem Securities said, "Today most of the mid-cap IT firms showed positive momentum after strong numbers posted by Route Mobile. IEX surged over 19 percent after management announced to consider a bonus issue. Borosil Renewables continued its upward trajectory due to traction seen in the renewable industry. IRCTC was down 15 percent as there is a possibility of shares entering F&O ban today. We can see some movement in the banking sector as Moody's revised the Indian Banking system’s outlook to stable from positive.
"On the technical front, benchmark indices witnessed sell off after seven consecutive positive sessions. We believe the profit booking which was witnessed today is healthy for the market and any significant dip is a good opportunity to accumulate quality stocks. Immediate support for Nifty 50 is 18,300," Nigam added.
Sachin Gupta, AVP, Research, Choice Broking said, "After hitting the all-time high at 18604.45 in the opening session, the benchmark index slipped more than 200 points from the day high and made a low at 18378.15 levels. Finally, the index has settled at 18418.75 with a loss of 58.30 points while BankMifty ended at 39,540.50 levels. Most of the sectoral indices closed in red dragged by the Realty and PSU sector with a loss of 4 percent in a day while IT index was the top performer for the day.
"On the stock front, TechMahindra, LT, Bajaj Finserv were the top gainers while ITC, Tata Motors, Eicher Motors were the prime laggards for the day. On the technical front, the Nifty index has formed a long bearish candle at the top of the trend, which indicates a further reversal in the counter. However, the index has taken immediate support at upper Bollinger Band formation on the daily chart. While on an hourly chart, the stochastic has also tested the oversold zone. At present, the Index has immediate support at the 18200 level while resistance comes at 18,600 levels."
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said, "Profit-taking finally came into play, but not before key indices had hit fresh highs in intra-day trade. Markets may witness a select bout of profit taking by investors after the recent upsurge.
"On daily charts, Nifty has formed a Bearish Candle formation which is broadly negative. In addition, on intraday charts, the index has formed a lower top formation which also indicates intraday weakness. For day traders, 18,550-18,600 levels would be the immediate hurdle and below the same the correction wave could continue up to 18,350-18,300. On the other hand, above 18,600, breakout continuation formation will continue up to 18650-18675 levels. Contra traders can take a long bet near the 18,300 support level with a strict stop loss at 18,250."
Deepak Jasani, Head-Retail Research, HDFC Securities said, "Asian shares bounced on Tuesday, led by technology names across the region and as Chinese markets clawed back ground lost after disappointing economic data. European stock markets started the day fairly muted on Tuesday, following a day of losses the session before. World stocks climbed to a one-month high on Tuesday as a rally in technology shares and prospects of solid corporate earnings helped counter concerns about elevated inflationary pressures.
"Nifty formed an engulfing bear pattern on daily charts, suggesting some more weakness in the coming days. The next support for the Nifty could come in at 18,351, while a sustainable support could come in at 17,944. On rises 18,477-18,500 could offer resistance."
