Nifty traded in a narrow range yesterday, albeit with a mild negative bias, unable to build on the strong gains registered on Tuesday and finally managed to close just above the 5300 mark. On the candlestick charts, it has formed a ‘bearish harami’ pattern that is a potential bearish reversal pattern if the low of 5284 is violated. On the other hand the 10-day EMA (5277) has been acting as an important pivot point in the current up move and thus we prefer to rely on it for signs of reversal. Volumes were relatively higher and the breadth was in favor of declines with an A/D ratio of 1:1.7. Volatility picked up marginally to 18.39 vs. 17.83 as represented by India VIX, still trading near the lows of the year indicating a benign risk environment. Momentum oscillator has rolled bearish once again on the hourly chart, and the same on the daily chart is on the verge of rolling over. Today’s session is likely to be a hectic one with the start of the corporate results season and key economic data releases. Bulls need to defend the 5277 mark with valor in order to help the index achieve its target of 5440. A breach of supports on closing basis would suggest a downward corrective move for target of 5125.
Barring the meager gain in Cap Goods (+0.37%) index, all other sectoral indices ended lower. Among the notable losers were shares from Auto (-1.18%), FMCG (-1.14%) and Realty (-1.06%) sectors. The broader market indices shared less of the selling brunt as compared to their frontline peer as the Mid-cap index lost 0.12% and the Small-cap index lost 0.24%.
Bullish Setups: CNXBANK, AXSB, PWGR, BHEL, ITC, BHARTI
Bearish Setups: TTMT/A, JETIN, WPRO
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