Sudeep Shah, Technical Research and Derivatives Head, SBI Securities
Market insight: On Friday, benchmark index Nifty made a weak start with a gap-down, but found support near its 50-day EMA. The index quickly recovered from intraday lows and closed the morning gap. But it did not manage to sustain the momentum at higher levels and finally closed near 25500 levels with a fall of 0.07%. On the daily chart, Nifty formed high wave candles with long wicks at both ends. This is a sign of increased volatility during the day.
This pattern shows that sellers are selling at upper levels, while buyers have provided strong support at lower levels. This helped the index make a sharp recovery of 225 points from the day’s low. This price fluctuation is indicative of a tug-of-war between bulls and bears in which bulls are trying to take hold of the market after weakness.
Talking about sectoral indices, largely mixed performance has been seen here. Nifty Metal, Nifty Financial Services, Nifty PSU Bank and Nifty Auto have been among the best performing indices. Rotational buying has been seen in these. In contrast, slight profit-booking was seen in Nifty IT and Nifty FMCG.
Mixed trends have been seen in small and medium stocks. Nifty Midcap 100 outperformed and closed 0.63% higher, while Nifty Smallcap 100 declined 0.16%. Of the Nifty 500, around 244 stocks closed in the green, while around 251 stocks closed in the red. This is a sign of a flat stance.
nifty view
Further, the 50-day EMA zone of 25330-25300 for Nifty will act as immediate support for the index. A break below 25300 may take Nifty towards 25150. On the upside, zone 25600-25620 will act as an important resistance. A strong move above this band could trigger a new uptrend in Nifty.
bank nifty view
For the banking index, the 20-day EMA zone located at 57400-57300 will act as immediate support. A move below 57300 may extend the decline towards 56800. On the contrary, 58200-58300 zone remains an important resistance. If Nifty moves above 58300, it may move towards 58700 in the near future.
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