Nifty formed a Doji pattern on the daily chart as the closing was near opening level.
A Doji candle indicates indecisiveness among the bulls and the bears and also that bounces were being sold in the absence of follow-up buying interest.
After opening sharply higher at 15794, Nifty gradually extended gains to hit an intraday high of 15820 in late trade. Nifty climbed 119 points to close at 15812.
Nifty extended the rally after a strong opening and stayed in the positive terrain through the session to close above 15800, driven by banking & financials, select metals, auto, and pharma stocks.
Global cues are upbeat, however, support from the banking pack is critical for any sustainable up-move in the Nifty index. Besides, participants will also be eyeing the results of the IT major, Infosys Ltd, scheduled on Wednesday i.e. July 14. Amid all, we feel it’s prudent to maintain focus on the selection of stocks and managing overnight risk until we see the resumption of the uptrend.
Following favourable economic outcomes and positive Asian markets, domestic bourses traded positive today. Asian shares sparked a rally after better-than-expected Chinese economic data and a bounce back in Chinese tech stocks. Though June CPI inflation continued to remain above RBI’s tolerance level, it eased to 6.26 percent from 6.30 percent in the previous month giving some relief to the market. Industrial production (IIP) for May grew 29.3 percent year-on-year (YoY), essentially due to a lower base.
Nifty has been moving between 15632 and 15915 for the last 15 trading sessions and requires a decisive range breakout to commence the next leg of the rally.
Nifty closed with a three digit gain by the end of the day, it registered a Doji kind of indecisive formation as the bulls failed to build on to the gains of the gap up opening. Hence, it becomes critical for this index to sustain above 15744 level in next trading session.
If the index manages to defend 15744 and goes past 15820, chances of heading towards the upper end of the trading range, placed at around 15915.
As the market is in a 300 point consolidation mode between 15915 and 15630, if the Nifty breaches 15744 on the downside, it can retest the lower end of the band towards 15630.
It will be prudent to remain neutral on the Nifty as the best buying opportunity will arise only on a strong close above 15915.
Sector Wise :- Barring IT, teck and FMCG, all ended in the green, with banking and financial indices rising over a percent each.