Nifty opened with a good upside gap of nearly a 100 points and maintained the rally for first half of the day. From 1.30 pm onwards a consolidation in the range of 7150-7185 was witnessed.
On the daily chart of Nifty, we saw a hammer pattern formed on Friday. Today there has been a very good rebound which took the index some 2.54% higher which was 177 points up, closing just above 7150 at 7158. However , if we look at the momentum indicator, not much hope comes to us as the index had breached the level 30 previous day and this indicates that weakness is still to follow. On the upside also, we have a resistance in the zone of 7250-7265 to look for in Nifty.
Taking a look at the sectoral performance, the banks were very bullish today, with the positive comments coming in from Bank of Baroda’s management and the government’s word of providing a meaty provision to the banking sector . However it was not just the Indian banks that were up but also European and Japanese banks. What we saw today was more of a sentimental wave than the real picture.
The steel sector was also on fire , specifically Vedanta and TATA Steel. The European union (EU) has imposed anti dumping duty on steel which is a positive news for the European subsidiary of Tata Steel.
The IT Sector kept to the sidelines today instead of participating in the rally. So was the pharmaceutical sector.
CHART OF THE DAY
Vedanta gave a very good bounce today . It closed 18% higher from yesterday. There are a couple of positive technical indicators, let’s discuss them in details.
The volumes are giving a very good indication on this chart. On every rally, the volume had also picked up which is a sign of heavy accumulation happening at the support zone of 60-65. Other than that, inspite of consecutive lower lows registered by the price, the moemtnum indicator RSI has formed higher highs that too at good levels above the dangerous 30 zone.
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