Analyst Somesh View - Closing Comments on 18th OCT 2021

2021-10-18 17:39:11 By Somesh


Nifty formed a bearish candle that resembled a Doji pattern on the daily chart as the closing was near its opening level.  

A Doji candle indicates indecisiveness among the bulls and the bears.

After a long weekend, Index opened on a gap-up note and made a new life-time high at 18543 level and showed strength through the session and closed the session at 18477 level with a gain of 138 points. Bank nifty also showed strength and closed the session at 39684 level with a gain of 343 points.

Nifty started the week on a strong note with yet another record closing high of 18477 despite nervousness in global markets and an uptrend in oil prices. IT, metals, banking & financials and select FMCG stocks powered the index to end higher for the seventh session in a row.

Metals & PSU Banks led the Sensex closer to the 62K mark today even as we saw mixed trends in other sectoral indices with profit-taking observed in few over-owned names. 

Robust home sales witnessed in several cities during the September quarter do indicate a multiplier effect in several sectors as the earnings season is underway ahead of the Festive season. The broader markets remained buoyant with the Small & Midcap indices showing robust activity today.

Broader markets also joined the rally as the Nifty midcap index was up 1.17 percent and smallcap index gained 0.7 percent.

Spike in volatility suggests a volatile move could be seen but the main reason for the spike in volatility was Call unwinding pressure in the market. Now VIX needs to cool below 15-14 zones to continue the smooth market ride.

Index gaining almost 1100 points in 10 sessions, market may have reached a point where consolidation looks inevitable.

Hence, In the next trading session if the Nifty trades below 18445 levels for at least 30 minutes, it can attract profit booking which should ideally drag it down towards 18350 level.

As momentum is strong, if the index manages to stay above 18500 for at least two sessions, a target of 18900 can be expected.

Considering that the Nifty has gained 1100 points in just 10 sessions, Traders should avoid long side bets.

Except pharma, all other sectoral indices ended in the green with Metal, Power and PSU Bank indices added 2 to 4 percent.

Closing Comments

Expert's View

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