Technical Analysis for Monday`s Market ( 14 June 2021 ) is based on Market Trend of previous Trading Sessions.
After showing sustainable upside bounce on Thursday, Nifty shifted into a follow-through upmove on Friday amidst a range bound action and closed the day higher by 61 points. Nifty opened on an upside gap of 59 points, made an attempt to move up in the early part of the session. New all time high was formed at 15835 and the market slipped into minor intraday correction from the highs. The range movement with positive bias continued in the second half and the market finally closed on an upside recovery note. The opening upside gap has been filled completely.
A small body of positive candle was formed with minor upper and lower shadow on the daily chart. Technically, this pattern indicate a formation of doji type pattern at the new highs (not a classical one). Normally, a formation of doji after a reasonable decline or at the new highs signal a caution for bulls at the highs. A decline in the subsequent session could only considered as a reversal pattern. On the other side, a sustainable move above the high of doji (15835) is likely to negate the negative implication and could bring bulls back into action.
Nifty on the weekly chart formed a small positive candle with minor lower shadow. We observe four back to back positive candles on the weekly chart without any reasonable downward correction. This market action is also point towards bullish ‘three advancing soldiers’ pattern, which is uptrend continuation pattern.
Conclusion: The short term uptrend continued in the market after one day of recent dips. Though, momentum on the upside has slowed down, the market breadth remains intact and there is no indication of any profit booking or reversal emerging from the highs. The next upside levels to be watched around 16000 and immediate support is placed at 15690. Request you to incorporate the same in your markets story today if possible.
Technical Analysis for Today`s Market by Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“Taking cue from decline in Covid cases, stock markets in India remained resilient this week. BSE Sensex and Nifty 50 continued to make record highs during the week. Both BSE Sensex and Nifty 50 moved up by 0.8% each in the week. Market rally remained broad based with healthy rally witnessed in BSE Midcap and BSE Smallcap index. BSE Midcap index gained 1.8% in this week and the returns in BSE Smallcap index was much higher at 3.5%. Majority of the sectoral indices moved in the positive direction. BSE IT, BSE Healthcare, BSE FMCG and BSE Realty saw gains of ~4.6%, ~3.7%, 1.6% and 1.5%, respectively this week. India’s daily new covid cases came down below the 1 lakh mark during the week. South West monsoons arrived in India and is expected to cover the country in coming weeks. S&P 500 hit a record high this week, brushing off concerns over high inflation data. Nasdaq too moved upwards in this week. The consumer price index in US rose by 5% in May 2021 – at fastest pace in nearly 13 years. Despite higher inflation, the US treasury yield have corrected sharply from ~1.63 last week to ~1.45%. The European Central Bank’s governing council maintained its high rate of bond purchases unchanged at its monetary policy meeting. The ECB revised euro zone GDP growth outlook upwards. The ECB increased inflation forecasts for 2021 and 2022. Markets are expected to monitor the spread of monsoon in the coming weeks, daily new case count and easing of lock down restriction. High inflation globally and firm crude oil prices are some concerns areas. FPIs have remained net buyers, month to date, to the tune of ~Rs.4769 cr underpinned by steady decline in Covid-19 cases in India and decent GST collections in April. We expect FPI flows to India, in the medium term, to remain strong as India is at a cusp of growth revival path. Interestingly, low interest rates, better exports outlook and revival in global economy is a good combination for India’s economic revival. Domestic demand revival will also be supported by upcoming festival season.”
The Market Wrap-up by Mr. Ruchit Jain (Senior Analyst-Technical and Derivatives, Angel Broking)
(Not updated for 10 June)“Nifty started the session marginally positive, but it corrected from the opening level and entered sub 15700 in the first hour of the trade. However, the index, then recovered from its lows and ended the day marginally in the red around 15740.
The index is trading around its resistance of 15770-15800 which we had mentioned about in yesterday’s market outlook. Nifty corrected initially led by the banking space but once again, the ‘20 EMA’ on the hourly chart provided support to the index and it recovered gradually from that support.
The market breadth continued to remain positive, however, a lot of sector rotation was seen today since the banking space took a backseat. The defensive sectors witnessed buying interest with IT leading the momentum in the morning trade, then some FMCG stock witnessed interest and at the end, the Pharma stocks made a comeback. This indicates that while the uptrend continues, some time correction/consolidation at the crucial juncture is seen and the momentum seems to be shifting to the above mentioned sectors. As far as levels are concerned, the immediate supports are placed around 15670 and 15600 while resistance is seen in the range of 15770-15800. A move above 15800 would then lead to a resumption of momentum in the index towards 16000.
Looking at the change of momentum between the sectors, traders are advised to focus on stock specific trades from the mentioned sectors where we could see some relative out performance in the next couple of sessions.”
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