It was a day of lackluster trading on the bourses as the tussel between the bulls and bears intensified ahead of the crucial announcement by the US Fed Reserve on further QE, resulting in the benchmark index trading in a tight range of 26 points for the day. Nifty has nearly tested the August high of 5449 and formed a doji candlestick pattern indicating a pause. Volumes continue to clock at an average level, while the breadth slipped in favour of declines on broader market weakness. Volatility has picked up a bit on the back of the global event, and the immediate near-term oscillators are trading in overbought zone, whereas the daily MACD and RSI are comfortably neutral. Nifty continues to trade in an uptrend forming higher highs and higher lows on the daily chart that will get extended after the US Fed’s QE3 announcement overnight leading to a possible gap up opening near the 5500 resistance (previous swing high + trendline from Jul and Aug peaks) mark. On sustaining trade above the level, one can expect Nifty to go for the yearly high of 5630 in the near-term. A weekly close above 5450 would also bode well for the short-term bullish bias.
A mixed trend was seen in the sectoral indices in yesterday’s session. Prominent gainers were shares from FMCG (+0.58%), Oil & Gas (+0.44%) and Cap Goods (+0.43%) indcies; whereas losses were registered in Healthcare (-1.15%), Realty (-0.53%) and Autos (-0.37%) indices. Broader markets continued their underperformance with mild losses of 0.18% and 0.25% for the Mid-cap and Small-cap indexes respectively.
Bullish Setups: TCS, RIL, COAL, TTMT, SAIL, CNXBANK
Bearish Setups: IRB, SOBHA
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