Analyst Somesh View - Closing Comments on 3rd JUNE 2021

2021-06-03 17:38:28 By Somesh

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Nifty formed a bullish candle on the daily chart as the closing was higher than the opening level.

Nifty formed a bullish candle with lower shadow on daily chart, which indicates that every small decline was being bought in the market.

After opening higher at 15655, Nifty hit an intraday high of 15705 and low of 15611. Nifty finally settled 114 points higher at 15690.

Nifty started off higher after two days of consolidation to trade in the green throughout the session and closed at a record high, a day ahead of the RBI’s monetary policy.

Banking & financials, realty, select metals and FMCG stocks lent support.

Markets remained firmly in the grip of bulls ahead of the RBI Policy as expectations of vaccinations being ramped up coupled with capex programs is likely to improve credit growth. Even as the street is expecting the RBI to continue with its accommodative stance while keeping a watchful eye on inflation led by rising commodity prices, we saw heightened activity in big names involved in building infrastructure and in select high quality midcaps.

Domestic markets witnessed a range bound rally with strong buying interest seen in realty and consumer durables with small and midcap stocks outperforming. Global market was cautious with the US and European markets trading in red ahead of the release of key economic US data. In the wake of increasing inflationary pressure, the domestic market is awaiting tomorrow’s RBI MPC announcement which is expected to maintain its accommodative stance.

Nifty registered a gap up opening, intraday trading range remained narrower with 94 points, which resulted in a small bullish candle but with relatively longer shadow, giving it the shape of an indecisive formation.

For the next session, it is critical that the index sustains above the minor bullish gap zone of 15611/15597. In that scenario, as momentum is strongly biased in favour of bulls, a higher target toward 15914 can't be ruled out.

If the index fails to sustain above 15597 on a closing basis, it will be an initial sign of weakness and can drag the index to 15459.

Traders should remain neutral on long side, while intraday traders can try to short below 15590 for a target of 15459.

Sector Wise :- Buying was seen in the infra, metal, FMCG, energy and banking names, while pharma stocks remained under pressure. Midcap also touched a record high with a percent gain and Smallcap index also added 1 percent.


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