Half of Nifty50 stocks trade below oversold zone

Sandeep Porwal, Technical Analyst, Ashika Stock Broking

The prevailing phase of sell-off engulfed almost all the world markets in the matter of a month. The rush to sell equity seems unprecedented. The gap down opening every other day is rather worrisome for both traders and investors. More than half of Nifty50 stocks are trading below the oversold zone of 30 this includes the index heavyweights such as the HDFC twins, Reliance Industries and ICICI Bank.

A major dent in the chart structure was witnessed in Monday’s session. The index staged a plunge of 5%. Volatility in crude and global markets are rather adding more triggers to the selloff. Counter trend rallies may take place given the oversold state, 10,750 remains a strong resistance while actionable support pivots are placed at 10,300 and 10,000 levels. Traders are advised to stick to single-legged option trades in order to make most of the sharp swings with the defined risk per trades.