The bulls stamped their authority on Friday after they managed to pull the indices from the low of the day to close near the high in a final hour surge. After a fairly bullish week, the index opened flat and gradually slipped down by 50 points to breach below 5000, only to see a smart rally in the final hour and managed to close above the crucial 200 DMA. Volumes have been at an average levels and the breadth slipped in favour of declines. Volatility dropped marginally at 23.47 (as tracked by India VIX) but still remains in a short-term uptrend. Momentum oscillators have moved in an overbought state in the immediate near-term and are signaling risks of profit taking at higher levels. On the weekly charts Nifty has formed a large ‘engulfing bull / outside bar’ pattern that has potential to take prices higher in the coming sessions. The index has nearly retraced 38.2% of the decline from Feb 2012 high of 5630 at 5100 and on sustenance of the level is poised to test the 50% retracement mark at 5200. On the downside the key pivot is now pegged at 4965 i.e. the 50-hourly EMA. Sectoral trends were mixed on Friday with gains coming from Cap Goods (+1.78%), Realty (+1.40%) and FMCG (+0.89%) indexes. Among the losers of the day were IT (-0.75%) and Healthcare (-0.01%) indices. Broader market Mid-cap and Small-cap indices underperformed the frontline index with gains of 0.22% and 0.20% respectively.
Bullish Setups: LT, DLF, CNXBANK, REC, NCC, STER
Bearish Setups: DRRD, LICHF, INFO, HDFC, HPCL, ACEM
Regards,
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