Monday’s selling lacked the follow through as the index traded in a narrow range of 39 points throughout the day and ended with a minor gain of 6 points. Nifty seems to be locked in a tug-of-war between the bulls and the bears, oscillating between 5200 and 5040 without a decisive move in the offing. Volumes in yesterday’s session were below par underlining the indecisiveness in the current scenario, whereas the market breadth was marginally in favour of declines. Momentum is a mixed bag on the daily and hourly charts leading to the choppy price action. Nifty clearly faces resistance near the 50% retracement mark of 5200 and the bullish trigger is likely to come once that level is taken out, while the downside is well protected by the 200 SDMA at 5075 and the multiple swing support of 5040 that the bears are watching closely to gain an upper-hand. In the run-up to the June series derivatives settlement on Thursday, one could say the current scenario is like “calm before the storm”.
Sectorally, the top gaining indices of the day were Oil & Gas (+1.2%), Pharma (+0.91%) and Banks (+0.45%). The underperforming sectors of the day were FMCG (-0.81%) and Metals (-0.33%). The broader market indices ended mixed with CNX Midcap gaining 0.59% and the CNX Smallcap index losing a marginal 0.06%.
Bullish Setups: TATA, HUVR, HMCL, HPCL, DRRD, SBIN
Bearish Setups: COAL, TCS, MSIL, HDFC
Regards,
Edelweiss Research
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