Analyst Somesh view - Closing Comments on April 6

2021-04-06 18:06:18 By Marepally Krishna

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Nifty formed an Inside Bar and a bearish candle along with a long shadow on the daily chart.

 

Nifty opened higher at 14737 and hit an intraday high of 14779, but wiped out gains in to hit a day's low of 14573 amid consolidation. Nifty showed some recovery in the last hour to close with 45 points gains at 14683.

 

After a volatile first half, Nifty remained rangebound in the afternoon session to settle with moderate gains. The rebound indicated that the market may be optimistic despite the resurgence of COVID cases. The positive global cues also provided support.

 

Market is attempting a strong pullback from yesterday’s low as the announced lockdown is unlikely to really dampen the economic growth trajectory. There is a great hope that economic restrictions, summer season and vaccination will lead to a fall in covid cases. The pullback is also supported by a strong rally happening in global markets. 

Domestic market was awaiting the RBI policy with an expectation to maintain the status quo, future commentary on growth & inflation will be highly viewed with an optimistic outlook on FY22.

 

Expect the markets to remain volatile as investors try to gauge the impact of restrictions imposed by state government to curb the spread of the virus. Moreover, the upcoming RBI monetary policy and earnings announcement from companies would also keep the volatility high.

 

It appears to be the day of consolidation on the bourses as Nifty remained in a narrow range of 206 points but the price move was completely listless for the major part of last two hours as trading range was confined to almost 30 points. Hence, Market may be heading for a make or break kind of a day in the next trading session which can be prompted by the RBI monetary policy outcome.

 

However, Bulls need a close above 14850 level to get their mojo back in the near term whereas a close below 14600 shall set the tone for a sharp decline with initial targets placed around 14263 level.

 

Considering monetary policy outcome and the listless behaviour of markets with a negative bias, Traders to avoid long positions unless Nifty closes above 14850 level, whereas, aggressive traders with high risk appetite can initiate intraday shorts below 14573 for a target of 14420 by placing a stop loss above intraday high.

 

Sector Wise :- Metal and pharma indices rose over 1 percent each, while some selling saw in the banking names. Midcap and Smallcap indices rose 0.8-1 percent.

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