Nifty has been consolidating since the last two days between the range of 7480-7420 ahead of the FOMC meeting. Similar lack of action has been witnessed on the international markets as well.
On 16th Dec, 2015, the Fed had hiked rates by 25 basis points (bps) ie 0.25% , which was a first in 9 years, following which, the Nifty had witnessed a rally of nearly 5%, from the low of 7550 upto 7972. The fed has laid down a road map for 4 such hikes in total for the future , but taking into consideration the new Chinese woes, there is a word around that the Fed might second guess its earlier statement. A conclusive decision on the same will be made tonight.
Other events which contributed to the sluggish Nifty ending today is the derivative expiry for the January contracts and also the slide in crude oil prices. If we look at the Crude oil and Nifty charts side-by-side and the study the movements of the last few days we will see that crude has essentially been leading the way for Nifty.
The aviation stocks gained today led by SpiceJet (14.47 per cent), InterGlobe Aviation (3.71 per cent) and Jet Airways (3.24 per cent). Positivity reigned among PSU banks on cue of HDFC quarter result announcements which were expected to be good, bring about a surge in union bank, oriental bank , Allahabad bank and Syndicate bank to be specific.
CHART OF THE DAY
Power Grid announced its un-audited third quarter results today and in its anticipation a strong rally was witnessed in the stock today. It closed a wooping 9% up from its yesterday’s close. Prior to the rally today, the stock had given three phenomenal signals of reversal, namely:
It formed a doji, thereby indicating confusion and slow down of the bearish momentum in the stock, secondly, it took support at the trendlineand lastly, yesterday it formed an umberella pattern with a long lower shadow indicating that the bullish momentum had started catching up, over throwing the bears in this stock.