The news of the CGT imposition has fueled up the already NEGATIVE SENTIMENT in the market. How the CGT is going to be imposed, or whether it is going to be clamped on Stocks is not clarified as yet. But the news itself was enough to deter the Sentiments even further. The information carried in the news mentioned that the Government will not be charging it by using the former Tax regime, but will be drafting a new Tax regime. How and when this will be finalized is also another point to ponder.
Negative sentiments breads more panic, as such we have to just rely on the retracement areas to see how steep and deep the fall and damage is going to be.
Bottom fishing for the value Investors is what is going to take place, as the Panic selling doesn't care about value when they sell. Traders too will benefit if they spot swing lows as and when they take place.
The next support will be the 38.2% fib resistant level of 6380 points, and if that happens tomorrow, then the RSI will be below around 25 points, as it is at 31 at the end of today's trading.
Assuming a swing low at 6300 points means that the index had moved 500 points from the March low of 5800 points. This is roughly 175 points per month increase for 2.5 months. Given the negative sentiment in the market the pace is still too fast, which can take the index upto 7350 points.
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