Nifty formed a bullish candle on daily frame with long upper shadow as slight profit booking was witnessed in the concluding hour.
Market has formed a shooting star pattern at the top of the rally, which is an indication of an uncertainty in the market.
Sensex was up 76 points or 0.13 percent at 60135, Nifty was up 50 points or 0.28 percent at 17946.
Markets started on a positive note following positive Asian market cues as investors took comfort on news of opening up more vaccinated travel lanes in 8 countries as covid cases declines. During the afternoon session markets continue to trade handsomely as broad gains in rate sensitive counters, viz, auto, realty and utility.
Further, Even improved risk appetite in backdrop of positive global set up has kept the sentiment upbeat. Traders also took support as data showed country’s exports growing at a healthy rate. Exports have touched USD 197 billion during April-September this fiscal. Additional optimism came in as foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 1997 crore so far in October.
Domestic market continued its bullish run backed by gains in banking, power, realty and auto sectors. However, the indices gave away early gains following weakness in global peers due to rising commodity prices and the upcoming earnings season, compelling investors to trade cautiously.
Auto sector continued its outperformance in expectation of demand revival during the festive season and power & renewable energy will continue to be in focus.
Banking stocks followed the trend owing to strong business preview numbers and favourable credit growth data. However, the IT sector was under pressure as initial earnings releases failed to meet market expectations.
Market continued to gain momentum on the third straight day and touched another record high, though ended with marginal gains on profit booking in the final hour of trade.
Nifty scaled mount 18K today, led by Reliance, auto and power stocks even as the IT Index faced profit-booking throughout the day.
Broader markets saw heightened activity in exchange stocks with the Nifty PSE stocks lending good support. The afternoon session, however, did see profit-booking as stocks do remain vulnerable to earnings disappointment.
There should be a strategy to reduce the weak-long positions in the market to the resistance level that exist at 17980/18040 and 18080. If the Nifty forms a positive reversal after hitting the major supports that exist at 17850 or 17810, a buy call is advised. In case the Nifty closes below the 17,800 level, it could weaken further to the 17,600 level.
On the technical front, Indicators such as RSI and MACD show that strong positive momentum in Nifty is likely to continue and we may see 18200/18300 level in the short term. Strong support can be seen at 17700 level, while the 18200 level may act as an immediate resistance.
If the market is able to sustain the level of 18000, it can witness higher level of 18250. Momentum indicators like RSI and MACD indicating positive momentum is likely to continue.
Sector Wise :- IT index fell 3 percent, while auto, bank, metal, power and realty indices added 1-2.5 percent. Midcap and smallcap indices rose 0.5 percent each.