The week's proceedings began on a negative note, carrying on from the 'bearish engulfing / key reversal' day on Friday. Nifty opened at the high of the day which meant, there was going to be selling pressure throughout the session and indeed it closed 1.30% lower, breaching the 5700 mark. Infact, as the ST momentum had rolled bearish on Friday, the weakness was expected and is likely to continue in the immediate near-term until it tests important supports. The session was marked by low volume activity, whereas the breadth was marginally in favor of declining stocks on the back of continued profit taking. Volatility climbed up by 2.3% to 17.17 on the India VIX underlining the weakness, where participants look to buy protection. On the intraday charts, Nifty has dropped below its 21 and 50 hourly EMAs of 5725 and 5713 respectively that will act as immediate resistances. For the coming sessions, we expect the weakness to extend down to 5650 / 5630 where renewed buying is likely to emerge, that should help Nifty get back in trend towards its ultimate target of 5930. Only a close below 5600 would call for a review of the multi-week uptrend.
Barring the gain of 1.20% for the Healthcare index, all other sectoral indices ended the day lower. The biggest knock was taken by Realty (-3.50%), Oil & Gas (-2.77%) and Cap Goods (-2.70%) indices. The weakness was more prominent in the frontline stocks, and the broader market indices managed to outperform as the Mid-cap index lost 0.44% and the Small-cap index lost 0.16%.
Bullish Setups: CNXBANK, BHEL, ICICIBC, PF, JPA
Bearish Setups: JSP, HMCL, BJAUT, IRB
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