Markets In A Distribution Phase, Says Analyst
The benchmark indices ended a choppy session higher ahead of the announcement of the GDP data on Thursday, led by ICICI Bank Ltd. and Reliance Industries Ltd.
India's equity markets are currently in a distribution phase, a bit elevated than comfortable, according to Jai Bala, founder and chief market technician at Cashthechaos.
Bala said if the markets stay above the 21,530 mark, then it will push for further highs. If the markets fall below 21,530, then it's time for corrections.
“Yesterday, Reliance (Industries Ltd.) closed below Rs 2,907 but today’s bounce looks like a corrective rally. So, a little bit leaning towards the negative side.”
On the Bank Nifty’s performance, Bala said the performance looks very ‘deceptive’. It's unlikely that it will reach 'higher highs' in the medium term, he said.
“Quite a few banks have started to look vulnerable. There is even a short trade on one of the private sector banks," Bala said. "So, not much comfortable with the banking index."
At the lower end, crucial support is positioned at 21,950 for the Nifty, according to Rupak De, senior technical analyst at LKP Securities. "As long as the index maintains a position above 21,950, there's a possibility of witnessing a recovery."
"Nevertheless, a decline below 21,950 could potentially lead the index towards 21,800," De said.
The benchmark indices ended a choppy session higher ahead of the announcement of the GDP data on Thursday, led by ICICI Bank Ltd. and Reliance Industries Ltd.
The S&P BSE Sensex closed 195.42 points, or 0.27% higher, at 72,500.30, while the NSE Nifty 50 advanced 31.65 points, or 0.14%, to end at 21,982.80.
On Reliance Industries and Disney’s creation of a Rs 70,352-crore joint venture, Mayuresh Joshi, head of research at Marketsmith India, said the Indian company will benefit in terms of sports, movies, over-the-top, and digital entertainment.
Joshi also said there will be notable market share gains for both regional viewership and cable viewership. He said there will be a huge revenue gap visible in the industry post the merger and moving forward, they can also expect consolidation.
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