RepleteBell Market Update

Market update 6th October 2017

The S&P BSE Sensex that rose 222 points on Friday rallied 531 points for the week ended 6 October. The Nifty50 closed above 9,950 and rose 191 points in 3 trading sessions.

A strong closing of US market gave much-needed support to India equities that ended in the negative territory within the previous trading session that helped Sensex to gain up to 252 points in intraday trade.

At the close of market hours, the Sensex was up 222.19 points at 0.7 percent, whereas the nifty ended 91 points higher at 9979.70. The market breadth was healthy as 1,701 shares advanced against a decline of 961 shares, whereas 115 shares were unchanged.

Reliance Industries, Sun Pharma, Infosys, SBI, HUL, and L&T led the rally, while HDFC, Hero Motocorp, Dr Reddy’s and Tata Motors DVR slipped in trade.

The S&P BSE Midcap index closed 148 points higher or 0.95 % to 15,840. The rally in the index was led by gains in SAIL, Endurance Technologies, Muthoot Finance, Crompton Greaves, JSPL, Chola Finance etc. among others.

The S&P BSE Smallcap index closed 180 points higher or 1.09 % at 16,629.23. The rally was led by gains in BASF India, VLS Finance, Arshiya Ltd, Shree Pushkar Chemicals, Minda Corp, Jamna Auto, Ballarpur Industries, Aptech, JBF Industries rose within the range of 20-10 %.

On the sectoral front, S&P BSE Metal index rose 3.14 percent, followed by the S&P BSE oil & gas index that gained 2.09 percent, S&P BSE PSU index gained 1.8 percent.

The S&P BSE Metal index has been in the spotlight throughout this week gaining 4 % this week. The rally on Friday was led by gains in Tata Steel that gained up 4.7 % after it reported higher domestic sales of 3.13 million tonnes (MT) and production of 3.02 MT during Q2 FY 18.

The Oil & gas index rose 2 % on Friday led by gains in GAIL that was also the top percentage gainer on nifty, up 5 %, followed by Petronet LNG that gained 2.3 percent, and IOC which was up 2.3 percent.

Jubilant Foodworks rose 4 % when Morgan Stanley upgraded the stock from ‘Equalweight’ to ‘Overweight’ and has hiked the price target on the stock from Rs 900 to Rs 1,780

Indian markets climbed the wall of worries after the reserve bank of India (RBI) kept key rates on hold and raised 2HFY18 inflation projection to 4.2%-4.6% which minimizes the probability of a further rate cut in the year 2017.

The central bank also lowered FY18 GVA growth by 60 bps to 6.7 % from 7.3 % on the back of slowing 1QFY18 growth, lower food grains production forecast, the adverse impact of GST on investments and weakening of sentiment across consumer and business.

A part of analyst community feels that the rate easing cycle might have come to an end. Investors should avoid the duration trade in the backdrop of worsening fiscal and bond supply-demand dynamics.


Technical summary for 9th October

Finally Nifty close above our support level of 9950. The trend is bullish now will initiate our long trade once it ranko gave us a buy signal(one more green box).

NSENIFTY is long term Bullish as the 144 days moving average of 9,587.70 is increasing. The Relative Strength Index is at 53.99 in the neutral territory. The Relative Momentum Index is at 47.46 in the neutral territory. An important indicator for Elliott waves, the Elliott oscillator is at 7.74, in positive territory; this is a bullish sign. An equally important indicator, the STORSI is at 63.87. This value is in the neutral territory.

We detected a Gann Swing or Pullback that is usually a bullish pattern! It should be used with other indicators.


Additional information

Tomorrow’s projected High: 10,025.90, the projected Low:9,943.15. The top 21-day Bollinger band is at: 10,167.57 while the bottom 21-day Bollinger band is at: 9,679.46.

DISCLAIMER: – we are not a SEBI research analyst. Views posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading

About Sachin Siwal

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