Like each Friday of September, the session was an eventful one and began with a bullish gap helping Nifty rally ~1.5% intraday and finally managed a close above 5700 with a gain of 0.95%. The index had been consolidating in a ‘flag’ pattern for the past four days and in continuation of its preceding up move, a bullish breakout was expected. However, the bulls were unable to get the index past its July 2011 cycle high of 5740 resulting in a strong supply halving the day’s gains. Nonetheless, Friday’s session marked the weekly, monthly and quarterly close, all in the positive. Nifty also registered a fresh 52-week high and its second best month of the CY 2012, with gains of ~8.5%. Importantly, longer term momentum cycles have rolled bullish, with monthly MACD giving a bullish crossover just above the zero line. Coming back to the daily charts, volumes were relatively lower on Friday, but the breadth was in favour of advances indicating a bullish trend in the broader markets. Even the volatility dipped down to 16.16 as tracked by the India VIX. ST momentum has turned OB, but continues to underline the bullish trend. We expect the uptrend to continue, breaching the old barrier of 5740, towards a test of 5800. On the downside, it is recommended to trail reversal to the 10-day EMA of 5618.
Barring the marginal loss of 0.37% in the Realty index, all other sectoral indices ended the day with gains. The top gaining sectors of the day were Auto (-1.89%), FMCG (+1.42%) and Metals (+1.38%). A mixed performance was seen in the broader market indices where the Mid-cap index gained 1.14% and the Small-cap index gained 0.85%.
Bullish Setups: CNXBANK, GAIL, TPWR, CIPLA, BATA, PF, YES
Bearish Setups: DRRD, BHARTI, COAL, HEXW
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