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§ The index opened with a gap down owing to weak global cues and dropped sharply in the first half. It even broke below the crucial 5840 trend line support, to register an intraday low of 5825. Soon a sharp recovery set in as the index scaled 125 points off the low and managed to close above the 5900 mark, but down 1.25% from the earlier close. Hourly oscillators have turned bullish, although the daily oscillators are pointing lower. Market breadth continues to be in favour of declines. Nifty 50 stocks breadth was at an adverse 1:5. The index recovery has made a ‘hammer’ candlestick pattern that suggests the low of 5825 will be defended strongly in the near term by the bulls. We expect the market to consolidate in the range of 6080-5825 in the remaining part of the week with a positive bias. However, the medium term trend has turned in favour of bears which will cap the rallies.
§ All sectoral indices ended in the red despite a strong recovery in the second half. The market was dragged down by Realty, Metals and Oil & Gas shares, whereas Auto, Pharma and IT stocks recovered smartly to pull the market off the lows. RIL has made a trading bottom at 975 (multiple swing supports) from where a move upto 1030 is on the cards. Bullish Setups: ITC, HNDL, TATA, CIPLA, MSIL, HHBearish Setups: IOC, BHEL, TPWR
§ The DXY has resumed its uptrend taking support at the 21 DEMA (78.20) and is on course to test the 80.15 mark. EUR-USD is facing rejection from the confluence 10 and 50 day EMAs at 1.36 along with the MACD dropping below the zero line. Back home the USD-INR has rallied swiftly from 44.05 to 45.70 and is likely to test 46.05 in the near term from where strong supply is expected.
§ Interesting chart setups: TATA, LT, ITC, CIPLA, IOC, IVRC
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