As expected NIFTY rose up to 5500 but seemed like Market had a clue on RBI policy and started giving up on early gains after placing a weekly high of 5499. Many had expected the budget to come out with a clear direction for the economy and the stock market. All the hopes went into vain. Nevertheless, the big Union Budget turned out to be a “non-event” day for financial market. Market has reacted to this budget and Index lost nearly 200 points from week’s high. Although Budget provisions were hardly exciting, but there weren’t any negative surprises as well.
The weekly chart of the Nifty index closed marginally lower, but is trading above its 50 week EMA. But there are negative patches on cards; the index has closed lower 4 weeks with substantial volumes which indicates distribution.
The technical indicators are bullish, but showing signs of weakness. The MACD is positive and above its signal line. The ROC is positive and above its 10 week MA, but forming a bearish pattern of lower tops and lower bottoms. The RSI is above its 50% level. The slow stochastic is also above its 50% level.
Index had found good support around 5200, but was unable to reach up to the recent high of 5600 and has started forming “Symmetrical Triangle” pattern. It would be interesting to see whether this pattern breakout gives reversal signal or continuation of uptrend signal.
Conclusion: The likely outcome in the near term is some sideways consolidation till the supply-demand equation between bulls and bears get resolved. NIFTY traders can go long near 5200 and take short positions near 5500 for some quick gains. Watch 5200 put option and 5500 call option for the next signal. Addition in 5200 put OI would act as support where as decline in OI for put option would provide signs for a downside breakout. Do not expect a runaway bull market as long as interest rates and oil prices remain high. Keep an eye on 5305 any close below can drag down Nifty to 5244 and 5206.
No comments:
Post a Comment