Stay stock specific, Nifty may see major correction

Nifty sustains the crucial 50 days MA as the selling continues for thethird consecutive day. Nifty is just a tad above its 50 days MA which isplaced at 17565 while the day's low was 17613.10. This MA was previously tested when Nifty had a brief consolidation for the entire June andJuly. The 20 days MA is also flattening out as ROC of MA is down indicating the consolidation in the offing. Nifty has also broken the support of key support trendline drawn from lows of July 2021 and thatis at least a sign of cautiousness, if not a signal in binary terms.

It was a volatile day with ferocious selling pressure seen in the earlyhours of trading and a quick recovery from lows. Despite coming intogreen both, Nifty and NiftyBank closed near the day low. The crucialsupport for the benchmark is placed at 17400-17360 levels which weremade during October and September and bulls would have to hold theselevels to make sure the bullish trend is intact. Sectors are alsobearish and no sector is any exception with most of them losing 3-6 per centfor the week.

We believe with breadth deteriorating and lesser participation fromcomponents, we may not be able to see the momentum we have witnessed offlate but a rather stock specific and sector play to happen goingforward. Nifty may see some support coming in at 17400-17350 while ifthis is broken we may be going in for a deeper correction towards 17050- 17080.

(The author is Technica lAnalyst, Finversify)