A morning walk down Dalal Street | Nifty may slip to 11,815 if it breaks below 11,866


A day which belonged to the bears from the word go as Nifty50 failed to hold on to 11950 but managed to close above 11900 levels on a closing basis on Wednesday. The S&P BSE Sensex saw a cut of nearly 200 points.

Absence of fresh triggers, fall in foreign liquidity and high valuations were among some of the other factors that weighed on sentiment, suggest experts.

Foreign investors, after pouring more than Rs 3000 crore in Indian markets on June 3 when Nifty scaled its all-time high of 12,103, have turned net sellers since then to the tune of Rs 2000 crore, SEBI data showed.

The final tally on D-Street – the S&P BSE Sensex dropped 193 points to 39,756 while the Nifty50 closed 59 points to close at 11,906. The broader market underperformed – the S&P BSE Midcap index fell 0.79 percent while the S&P BSE Smallcap index closed 0.48 percent lower.

The Indian rupee on Wednesday appreciated by 10 paise to close at 69.34 to the US dollar, marking the second straight session of gains driven by easing crude prices.

On the institutional front, FPIs were net sellers in Indian markets for Rs 1050 cr while the DIIs were net buyers to the tune of Rs 271 cr, provisional data showed.

Big News:

On expected lines, the core CPI for May increased to 3.05 percent from 2.92 percent in April.

The latest price data released by the Central Statistics Office showed that consumer price index (CPI)-based inflation, which measures changes in shop-end prices, remained comfortably within the Reserve Bank of India’s target level of 4 percent.

Some good news — India’s industrial output grew 3.4 percent month-on-month (MoM) in April hitting 6-month high, according to the Index of Industrial Production (IIP) data released by the government on June 12.

The IIP for March has been revised to a growth 0.4 percent, up from a drop 0.1 of percent reported earlier.

The Industrial output, or factory output, is the closest approximation for measuring the economic activity in the country’s business landscape.

Technical View:

Nifty forms bearish belt hold kind of pattern after forming Doji for 3 consecutive sessions

Nifty snapped three-day winning streak as it failed to surpass the immediate barrier of 11,975-12,000 and witnessed selling pressure towards 11,866.

Formation of multiple Doji candles indicates a tug of war in the 11,761-12,000 range.

In the next trading session, if it slips below 11,866 then it can initially head toward its logical target of 11,815, suggest experts

However, a breakout could be confirmed if Nifty scales above 12040-12103 levels

Three levels: 11866, 11962, 12040

Max Call OI: 12500, 12000

Max Put OI: 11500, 12000

Technical Recommendations:

We spoke to ICICIdirect and here’s what they have to recommend:

Bharat Electronics: Buy| CMP: Rs 107|Target: Rs 127|Stop Loss: Rs 99|Upside 18%| Time Frame 6 months

KSB: Buy| LTP: Rs 718| Target: Rs 824|Stop Loss: Rs 638| Upside 15% | Time Frame 6 Months

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