A morning walk down Dalal Street: Stay cautious till Nifty closes above double top resistance of 11,080

Tough day for bulls as Sensex failed to hold on to momentum and closed over 100 points lower after hitting a record high of 36,747.87 while Nifty slipped below 11K.

The monsoon session kicked off yesterday but it was not in style instead it added to uncertainty. A no-confidence motion against the Narendra Modi government was moved in the Lok Sabha which added to uncertainty in markets. 

The nervousness is likely to remain till Friday when the trust vote will happen. Analysts feel that markets are likely to remain under pressure although BJP enjoys full majority.

“Vote of no confidence motion was admitted in the Lok-Sabha by opposition parties, which was admitted by the speaker. Lok Sabha will debate on the fate of BJP government on Friday. Though BJP enjoys full majority, this development added to uncertainty in markets,” VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities told Moneycontrol. 

Nifty plunged more than 100 points from the intraday highs to close with the losses of 28 points at 10,980 levels.

The Nifty took resistance at 11078 levels, the same level it touched last week. The breadth of the market was heavily skewed towards declining stocks. 

Analyst advises investors to protect long positions in Nifty and trade with a strict stop loss placed below 10,900 on a closing basis. One should remain cautious till Nifty manages to close above the double top resistance level of 11,080.