Indian markets ended marginally lower on the back of strong profit taking at 5100 levels. Bullish cues from the Asian indices helped Nifty open with a gap up and print an intraday high of 5122 and consolidate in a tight range for the better part of the day. The final couple of hours saw the index crack down significantly driven by threats of an investment ratings downgrade by S&P that resulted in a break of the 21-hourly EMA support of 5049. Hourly momentum oscillators have rolled bearish, whereas immediate near-term oscillators are in overbought state calling for a correction in prices. Volumes were average in yesterday’s session and the breadth ended marginally in favour of advances. India VIX jumped to 25.02 levels, taking support at its 50-DEMA. Nifty has now retraced a little more than its 38.2% of the fall from 5630 to 4770 and is positioned to do 50% once a minor pullback is completed 4990 / 4950. Only a close below 4950 would signal a bearish reversal in the current set-up.
At the close of day, barring the IT index (+0.19%), all other indices slipped in the red led by Cap Goods (-1.64%), Healthcare (-1.34%) and Realty (-1.02%). The broader market indices on the other hand were mixed as the Mid-cap index lost 0.20% and the Small-cap index gained 0.21%.
Bullish Setups: CNXBANK, REC, HUVR, BPCL
Bearish Setups: DRRD, LICHF, INFO, HDFC, ACEM
Regards,
Edelweiss Research
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