After The Bell: Nifty slips below 15,000, what should investors do on Friday?

Weak global cues spoiled the party on D-Street on May 20 as benchmark indices breached crucial support levels to close in the red for the second successive day. The S&P BSE Sensex fell 337 points to 49,564, while the Nifty50 slipped below 15,000 to close 124 points lower at 14,906.

The broader market, however, fared better, with the BSE smallcap index closing 0.2 percent higher and the midcap slipping 0.16 percent.

The divergent views of US Federal Reserve members, as  indicated by the meeting minutes released on May 19,  over inflation as well as accommodative stance and ECB’s warning of potential bubble in financial assets do not bode well for global equities, including India, experts said.

“Domestic market witnessed selling due to lack of further domestic cues and weak global market. Wall Street extended its losses as the US treasury yields and dollar index jumped post the release of a watchful Fed minute, which was below the expectations,” Vinod Nair, Head of Research at Geojit Financial Services said.

“Fed minutes signalled a plausible slowdown in bond buying 'at some point', a shift in policy in the future, which will have an implication for EMs (emerging markets)," he said.

Sectorally, buying was seen in realty, capital goods, and consumer durables, while selling pressure was seen in metals, oil & gas, banks as well as the public sector.

“Metal stocks are witnessing profit booking after China said it would strengthen its management of commodity supply and demand to curb unreasonable increases in prices,” Mohit Nigam, Head PMS, Hem Securities said.

Here’s what experts think that investors should do on Friday:

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited

The Nifty formed a bearish candle on the daily scale and has been forming lower lows from the last two sessions. The index recently gave a breakout from its consolidation band but the absence of follow-up has again taken it back to broader trading zones.

It has to hold above 14,900 to witness an up move towards 15,050 then 15,200 zones, while on the downside, support exists at 14,800 and 14,700 zones.

Rohit Singre, Senior Technical Analyst at LKP Securities.

The Nifty saw profit-booking pressure for the second day and closed at 14906, losing nearly a percent, and formed a bearish candle for the second consecutive day.

The index may retest its descending channel breakout zone, if it turns right, we may see a good pull back from current levels towards the immediate hurdle zone of 15,000-15,100 but if it fails to sustain, profit booking is likely towards the nearest support zone of 14,850-14,775.

Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited

The market lacked upside momentum and corrected to close around 14,900. As of now, the short-term technical condition indicates that a correction is in process.

While it is subject to further price action evolution, it will be prudent to wait for a decisive breakout above 15000 before adding to the existing position. Once this level is met, the market can gain momentum, leading to an upside projection of 15,400.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

The psychologically important level of 15,000 proved to be a stiff resistance for the index but as it closed above, 14,700, the overall market trend remains bullish.

If it slips below 14,700, there will be a reason for concern as the Nifty can then slide to 14,400. On the upside, there is still room to achieve 15,300-15,400. All dips or corrections can be utilised to enter long positions.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.