Following up to the stellar rally, the markets traded firm in yesterday’s session and managed to nearly test the 200 SDMA at 5065. The index opened with a bullish gap tracking the positive trend across Asian peers but faced profit taking in the first half and closed the gap, only to rally in the second half that continued throughout the close of the session. However the day’s trading was restricted to a range of 52 points indicative of the tight tussle between the bulls and the bears. Volumes clocked in at higher levels and the market breadth remained in favor of advances. Volatility dipped further down to 23.64 levels from 24.90 levels as per the India VIX. Momentum remains in favor of an upside but has reached an overbought state on immediate near-term indicators that could result in a retreat in prices down to hourly support of 4975. Nifty is expected to close the week in the green and form a bullish engulfing / outside bar pattern which could drive prices higher in the coming week towards the 5095 resistance area.
For the second day, all sectoral indices closed in the green. The gains were led by Realty (+2.19%), Banking (+2.11%) and Auto (+1.32%) indexes, whereas Healthcare (+0.30%) and IT (+0.36%) indices underperformed. Broader market Mid-cap and Small-cap indices underperformed the frontline index with gains of 0.72% and 0.46% respectively.
Bullish Setups: LT, DLF, IDFC, CNXBANK, REC
Bearish Setups: DRRD, LICHF, INFO, HDFC
Regards,
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