Indian market witnessed profit booking at a higher level for the week ended November 10 as both Sensex and Nifty50 slipped by over 1 percent each. However, there was plenty of action in the small and midcap space.
The S&P BSE Sensex slipped by about 370 points or 1.1 percent while the Nifty50 dropped by 1.2 percent for the week ended November 10. But, nearly 200 stocks gave a positive return in the S&P BSE 500 index.
Stocks which rose in the S&P BSE 500 index include names like RattanIndia Power rose 31 percent, followed by Rain Industries (25 percent), Kitex Garments (23 percent), Titan Company (18 percent), India Bank (16 percent), MMTC (16 percent), L&T Infotech (15 percent), HSIL (13 percent) etc. among others.
Sectors which managed to outperform benchmark indices include Consumer durable which rose by 10 percent, followed by IT which gained 3.3 percent and Consumer Discretionary which gained 0.9 percent last week.
Among the laggards, the S&P BSE Energy index slipped 4.7 percent, followed by Healthcare index which dropped by 4.6 percent, and Oil & Gas index saw a decline of 3.3 percent in the same period.
The fall in the index was largely weighed down by rising crude oil prices and weak global cues from the US. The Nifty50 saw some selling pressure at higher levels after it came closer to 10500.
Crude oil is boiling at USD 57 a barrel. Power consolidation in Saudi Arabia and internal family issues have come to the forefront which has the potential to disrupt the peace in the Middle East.
“On the crude oil front, if something like Mahabharata is repeated between the two nations, then it will have far-reaching consequences for the global peace,” Jimeet Modi, Founder & CEO, SAMCO Securities told Moneycontrol.
The positive takeaway from last week’s price action was that the index closed above its crucial short-term moving an average of 20-DEMA placed at 10,281. Investors are advised to remain cautious and but bulls have nothing to fear as long as the index trades above 10,240-10,250.
The GST Council on Friday slashed rates on 178 items to 18 percent from 28 percent on Friday, which could benefit stocks under consumers, light electrical and home building. The move could well be a sentiment booster for markets in the short term.
“But, in the medium term, the market will remain under pressure due to high valuation. Long-term investors should not allocate fresh funds but can selectively book profits. The market closed the week at 10321.75 down by 1.25 percent,” said Modi.
The market has witnessed cracks in its uptrend. On the weekly charts, Nifty formed an Engulfing Bear pattern which is very reliable and powerful. All previous engulfing bear patterns in the weekly charts have resulted in decent time and price correction, suggest experts.
The momentum oscillator ‘RSI’ on a daily chart is showing positive hidden divergence, which generally takes place when the Oscillator makes a lower low, but Price makes higher lows. This is a positive sign for the index and shows a possibility of a resumption in the uptrend in coming sessions.
“Though a small correction from current levels cannot be ruled out in Nifty, we won’t initiate short in the index and rather be on sidelines for next couple of sessions,” Jay Purohit, Technical & Derivatives Analyst, Centrum Broking Limited told Moneycontrol.
“At the current juncture, we would be looking for the reversal signs around the support zone of 10170 – 10250 to initiate fresh long positions. Thus, buy on dips would be a prudent strategy for the coming week,” he said.