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§ Nifty plunged in the first half of Friday’s session breaking below the 5750 and 5700 mark on an intraday basis. It recovered from the lows in the afternoon, but last hour selling dragged down to close above 5750. The index has dropped for the third consecutive week, shaving off 10% for the high 6338. A lower top lower bottom formation on the daily and weekly chart indicates a downward trend in the short / medium term. Momentum oscillators are comfortably in sell mode; although hourly oscillators continue to consolidate with positive divergence. Market breadth was the weakest in the last three weeks. Nifty 50 stocks breadth was again at an adverse 1:5. Nifty is resting at the trend channel support at 5745, from where we expect a recovery to happen. Failure to do so will drag the Nifty down to 5600 area, from where the breakout occurred.
§ Realty, Consumer Durables and Metals stocks took the brunt of the selling, whereas IT, Banking and Pharma stocks outperformed the market. Broader indices like BSE Small Cap and Mid cap have taken a bigger hit, and are trading with a strong negative bias. Bullish Setups: BHARTI, DRRD, GAIL, HH, APTY Bearish Setups: IOC, BHEL, RELI, TTAN
§ The DXY is approaching the 80.65 (200 DEMA) which is likely to halt the rally in the short-term, and may even move lower towards the 79-78.70 mark. We maintain the USD-INR outlook to test 46.05 in the near term from where strong supply is expected. Commodities are trading mixed on the back of weakness in soft commodities and mild strength in Metals and Energy commodities.
§ Interesting chart setups: BHARTI, GAIL, CIPLA, IOC, RELI
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