Analyst Somesh View - Closing Comments on April 30

2021-04-30 20:18:02 By Marepally Krishna

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

 

Nifty formed a bearish candle on the daily chart but a bullish candle on the weekly chart with a long upper shadow, indicating it couldn’t sustain at higher zones.

 

Nifty started off the session in the red at 14747 and gradually moved lower to hit a day's low of 14674. Consequently, Nifty plunged 263 points or 1.7 percent to close at 14631.

 

Nifty snapped its four day winning streak , the first day of the May series following weak Asian cues. Rising COVID-19 cases and uncertainties surrounding vaccination also weighed on the sentiment.

 

Europe's economy shrank 0.6 per cent in the first three months of the year as slow vaccine rollouts and extended lockdowns delayed a hoped-for recovery and underlined how the region is lagging other major economies in rebounding from the coronavirus pandemic.The fall in output was smaller than the 1 per cent contraction expected by economists but still far short of the rebound underway in the United States and China, two other pillars of the global economy.

 

Market turned into a correction phase following weakness in the Asian market despite hopeful signs from Wall Street. Rising covid cases and uncertainties surrounding vaccination added more pressure on the market. Along with small-cap stocks, pharma, metal, and oil & gas were the sectoral gainers, while profit booking was seen in banking stocks.

 

Heavy selling in key pivotals including financials & HDFC twins kept indices in the red throughout the day as fears of localised lockdowns manifesting itself into a slowdown made investors cautious ahead of the state poll outcomes. Pharma & sugar stocks bucked the trend in today's trade.

 

Last Thursday's strong up move, on expiry session, is looking like a bull trap as markets failed to witness follow through buying. Moreover, with today's fall, the market erased preceding two trading sessions gains and closed below bullish gap area present between 14694/14667 level, which should offer some buying support.

 

As Nifty closed below this gap it seems to have reinstated bearish sentiment in the near term. Hence, in next trading session if Nifty fails to sustain above 14600 level, initially it may head towards 14450 level where 100day simple moving average is placed and which has interestingly offered support on closing basis.

 

In case Nifty fails to hold on to the said support, it should head all the way down to retest the recent low of 14151 level. For the time being last Thursday's high of 15045 level can remain as a near term top.

 

Positional Traders with a high risk appetite to make use of rallies to create short positions and look for an initial target of 14450 level whereas a close above 14900 can be seen as an initial sign of strength.

 

Sector Wise :-Bank, auto, IT, PSU bank and FMCG indices fell 1-2 percent, while pharma index rose 1 percent.


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