After a largely bullish session on Thursday, the markets struggled to hold onto the gains on Friday as the index slipped marginally lower to end at 5146. Weak global cues led to a negative opening below 5100 mark and saw the bulls struggle to overcome the losses multiple times but they finally managed to register some gains and keep their head above 5100. Nifty has formed an inside bar pattern i.e. it has traded within the range of the previous session, hence the boundaries of 5171 and 5093 will act as important trigger points for further direction.Volumes were higher relative to the average of the past few sessions and the breadth was marginally in favour declines. Momentum oscillators are bullish on the daily chart underlining the short=term uptrend, however on the hourly chart are showing signs of weakening which could the index lower if price action does not improve quickly. On the weekly charts, Nifty has registered its third consecutive gain after rallying swiftly from its 200-week SMA. This week is likely to see further choppy price action on the back of June series derivative settlement and could trade in a wide range of 5300 to 5000. We recommend a cautiously bullish stance as the bulls could possibly break above the 5200 barrier to target the 61.8% retracement level of 5300 as long as they are pivoted above the 200 SDMA of 5075 on a daily closing basis.
Most of the sectoral indices managed to end the day with mild losses with the exception of Realty (+0.41%) and Auto (+0.10%) indexes. The losers of the day were Metals (-1.48%), Cap Goods (-0.63&) and IT (-0.24%) indices. Mid-cap and Small-cap indices managed to outperform their frontline peer with minor gains of 0.13% and 0.04% respectively.
Bullish Setups: TATA, HUVR, HMCL, HPCL, DRRD, SBIN
Bearish Setups: COAL, TCS, MSIL, HDFC
Regards,
Edelweiss Research
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