Analyst Somesh View - Closing Comments on 26th JULY 2021

2021-07-26 17:25:24 By Somesh

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Nifty formed a bearish candle on the daily chart as the closing was lower than the opening tick.

Nifty formed a bearish candle and an inside bar on the daily chart and continued to form higher lows of the last two sessions.

After opening flat at 15849, Nifty traded in a narrow range of about 90 points. Nifty hit an intraday high of 15893 and low of 15797 before closing 31 points lower at 15824.

Nifty remained volatile throughout the session and ended a tad lower. Select banking and financials, auto and FMCG stocks pulled the market lower, while buying in IT, metals and pharma stocks limited the downside.

Indian Markets started marginally in red following negative Asian market cues as China tech and education shares plunge and Singapore’s manufacturing output decline 3% in June on a seasonally adjusted, month-on-month basis. During the afternoon session markets swung between positive and negative territory with lacklustre trade as traders were concerned as foreign portfolio investors (FPIs) offloaded Indian equities to the tune of over Rs 5689 crore in July so far as they continued to adopt a cautious stance in view of various domestic and global factors. 

European stocks were seen retreating as investors watch corporate earnings, Covid cases and German business sentiment which fell unexpectedly in July as supply chain constraints and rising Covid-19 infections dampened recent optimism.

Markets traded lacklustre and ended marginally in the red, tracking mixed cues. The beginning was downbeat following negative global cues however the index managed to recoup its losses and traded in a narrow range thereafter. Finally, Nifty ended lower by 0.2% at 15824 level. 

Broader markets too ended flat. Amongst the sectors, a mixed trend was witnessed wherein Consumer Durables, IT and Metal ended with gains while Auto, Capital Goods and Oil & Gas ended with losses. 

Nifty continued its lackadaisical way of trading as it remained in a range of 96 points before signing off the session with an indecisive formation. Hence, going forward strength in the index shall not be expected unless it registers a strong close above 15914 level.

In the next trading session, weakness can be expected if the index slips below 15768. As the bulls are repeatedly faltering from the 15914 level, it still appears to be a rangebound market between 15962 to 15578 level.

For a directional move to emerge, Index needs a breakout in either of the directions.

But as the advance-decline ratio favours the bears along with deteriorating oscillator/indicator setup on longer time periods, Bears may eventually gain upper hand unless the bulls claim their stake back with a strong close above 15916.

For the time, Traders should shift their focus towards stock specific opportunities to trade in either direction.

Sector Wise :- Nifty energy index shed 1 percent while bank, auto and PSU Bank indices ended lower. However, some buying was seen on the metal, pharma, and IT names.

Bank Nifty formed a Doji candle with long shadows on daily chart and has been forming higher tops from three sessions.

Bank Nifty opened negative at 34947 and remained rangebound for the most part of the session. Bank Nifty surpassed 35100 but could not sustain at higher zones. It moved in a zig-zag fashion and closed 84 points lower at 34949.

Bank Nifty has to cross and hold above 35135 level to move up towards 35347 and 35576, while on the downside, support is seen at 34799 and 34557 level.

 


Closing Comments

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