Investors should avoid buying at the moment: Nirmal Bang Research

BSEThe benchmark index slipped in late trade as investors booked profits after five? day wining streak. The Sensex was down 167 points at
16,719 after trading flat for most of the day. The Nifty ended below 5K at 4,970 down 50 points. Selling pressure was seen across all the sectors with only the BSE oil & gas index trading in the green. The Nifty Oct future ended at 4,981 with 11 point premium.

After a very long day of strong closing, markets have shown some kind of weakness ahead of the Sept expiry. Technically the oscillators on the daily RSI were at 73 indicating an extreme overbought sign and a pause for the rally was seen ahead.

Going ahead we believe that if Nifty breaks below 4,930 with huge volumes then this trend could get weaker and we could see further breakdown. At this current scenario we feel that buying should be avoided and let the markets correct and consolidate for fresh momentum to gather.

The first support exits at 4,930 if this gets broken then look for 4875?4810 as an important support region in coming days. On the higher side 4,990 again acts as a strong resistance level, even if nifty maintains above 5K we don't expect much of a big breakout on the higher side. So for the very short term higher side is intact and buying should be done only on a very sharp fall.

STOCK IDEA:

1) CORE PROJ (178) - This stock has been consolidating for some time in the region of 172?190, strong support is placed at 158 which is the 50? day moving average, can be bought with an investment view, if sustains above 183 huge momentum can be seen, short term target looks 205.

2) SUNIL HITECH (173) - Huge delivery volume witnessed in the counter, stock has been consolidating for some time in the region of 161?185, strong support at 160 which is the 50? day moving average, if maintains above 175 then look for a positive move, short term target looks 201.

Nifty future daily chart: The short term trend remains up unless nifty future breaks the 4,910 trend? line support as shown below. Nifty future has multiple trend? line support at 4,835 - 4,770 which will act as an important support area during this profit taking phase. These points can be used as a buying area keeping an appropriate stop? loss. On the higher side 5,055 will act as a strong resistance point, unless we see a breakout above this level fresh buying should be done on a selective basis.