Nifty opened in green with support from positive global cues. However, it traded quite volatile in today’s session, as it broke yesterday’s low of 4833 but bounced back. The index has given a positive daily close after six days of consecutive lower lows, signaling that there is probability of a pullback in wave iv up which will be 23.6-38.2% retracement of the fall from 5293 to 4825. The volumes are increasing day on day with falling prices, clearly indicating that the trend has reversed. Though a pullback is expected, we maintain our bias down as it will be just a dead cat bounce after which wave v shall ensue, which will take Nifty below 4825-level.
On the daily chart, Nifty is trading below its 20 daily moving average (DMA) and 40 daily exponential moving average (DEMA) at 5172 and 5102 respectively, which areits near-term resistances. The momentum indicator (KST) has given negative crossover and is below the zero line. The market breadth was negative with 567 advances and766 declines on the NSE and 1,126 advances and 1,725 declines on the BSE.
On the hourly chart, Nifty is trading below its 20 hourly moving average (HMA) and 40HMA at 4928 and 5024 respectively, which now are its short-term resistances. The momentum indicator (KST) has given positive crossover and is trading below the zero line The F&O (January) contract expiry was exciting and exacting with Nifty and Sensex ending the session 14 and 17 points higher respectively. Of the Sensex stocks, Reliance Communications (down 2.03%) and Larsen & Toubro (down 1.97%) were at the bottom of the 30-stock chart while Dr Reddys Laboratories (up 4.54%) and TISCO (up 4.81%) were chart toppers.
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