Stock market today: Nifty 50 breakdown 50-DEMA support. Opportunity for bottom fishing?

Stock market today: After breaching the 50-DEMA support placed at the 20,050 mark, the Nifty 50 index deep dived during Thursday session and touched an intraday low of 24,755 mark, recording around 375 points in three straight sessions. The BSE Sensex lost over 1,000 points while touching an intraday low of 80,959. 

According to stock market experts, DIIs await more crashes after FIIs sell at higher levels, awaiting the US Presidential Election results and the Maharashtra Assembly poll outcome. However, the market is expected to find support at around 24,700; some relief rallies can be expected at the bottom levels. They advised bulls to wait as the Nifty 50 index may go down to 24,350 to 24,300 mark if it breaks down below 24,700 support on a closing basis.

Investment Strategy in the Falling Indian Stock Market

Unveiling the trade setup in this bearish Indian stock market, Mahesh M Ojha, AVP — Research at Hensex Securities, said, "The Indian stock market is falling because FIIs are selling at higher levels and DIIs are not in the mood to buy at these levels. This FII-DII trend is because of the US presidential elections and the Maharashtra State Assembly polls. These two poll outcomes are expected to decipher the move of FIIs and DIIs. I am expecting a relief rally in the near term. However, the market is expected to remain range-bound till these two election results are out."

"Even if there is a relief rally, I expect the Nifty 50 Index to retest its 24,700 support after deep diving below its 50-DEMA support of 20,050. If the 50-stock index breaches below 24,700 on a closing basis, the frontline index may go down to 24,350 to 24,300 range," said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

Stock market strategy

Unveiling the investment strategy in this bear-ridden market, Anshul Jain of Lakshmishree Investment and Securities said, "Bottom fishing is not advisable at current levels. One should buy only when the Nifty 50 index is above 25,200, or it nosedives around 24,400."

Both experts favoured metal and IT stocks on segments that may provide better stocks for bottom fishing.

Stocks to buy today

Regarding stocks to buy today, Anshul Jain said, “In the metal segment, one can look at Vedants and National Aluminium Company or NALCO. In the IT segment, one can look at Infosys and Persistent Systems shares.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decision.