§ Based on the positive overnight global cues, Nifty opened substantially higher, made a new high of 6223 and started paring the gains. By the end of the session, Nifty managed to regain some lost ground to close higher. On the intraday charts, it is consolidating in a horizontal range, and holding above the 21 hourly EMA (6161), that suggests that there is a tussle among market participants to take control of the market. The momentum oscillator is trading with a sell on the hourly chart, but gradually drifting near the zero line indicating a time correction, than a price correction. The daily MACD continues to remain in line with the overall up trend. Overall market breadth ended in favor of the advances. Nifty stocks’ breadth was robust at 2:1. We expect the index to hold on to the support of 6118, and attempt a breakout of the short-term consolidation range in pursuit of the 6350 peak. Fresh index is buying is advisable only on break above 6223 with appropriate stop-loss.
§ Realty, Metals and Oil & Gas stocks kept the bulls interested, whereas FMCG, Pharma and Banking stocks kept the bears alive. Shipping counters rallied substantially yesterday with potential trade opportunities in GESCO, ESHIP and MLL. We reiterate the bullish call on ADAG stocks like RCom, Rel Infra and RelCap that offer good 8-10% trading opportunities. Frontline banking stocks will continue to to be a drag on the market Bullish Setups: UT, KMB, JPA, CIPLA, BHEL, ESOIL, RCAPT, HZ
§ A smart rally was seen in most global indices, especially on SPX, managing a close above 1150 and triggering technical buying. The index has potential to test 1200-1210 within the next couple of months. Gold has nearly tested the $1350 mark. We continue to maintain a cautious stance on Gold at current levels. DXY has now retraced 78.6% of the rise from 74.20 – 88.80 at 77.30. Dollar bulls should look to accumulate long trades till 76 for a short-term pop.
§ Interesting chart setups: ESOIL, KMB, UT, BHEL, RCAPT
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