Analyst Somesh View - Closing Comments on April 8

2021-04-08 18:33:56 By Marepally Krishna

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

 

Nifty formed a Doji candle as after a wild swing within a range of 160 points, it closed near the opening level but closed positive after gaining around 50 points. It formed higher lows from the last third session running.

 

A Doji candle indicates there is some indecisiveness among the bulls and the bears and bounces were being sold in the absence of follow up buying interest. 

 

Nifty opened in a positive terrain at 14875 and remained higher throughout the session. Nifty touched an intraday high of 14984, but wiped out some gains in the last hour of trade to hit a day's low 14821, before closing 54 points higher at 14873.

 

Nifty traded higher throughout the session amid volatility, backed by metals, IT, select FMCG and auto stocks. 

 

Let not the more or less flat closing in Thursday's trade take away the credit from the bulls who simply took away the honours with a mighty rally across metal names with admirable support from cement stocks. The broader market witnessed sustained buying interest in sugar & fertiliser names.

 

Domestic market continued its optimistic rally supported by dovish monetary policy though it witnessed consolidation during the second half due to selling in banking stocks. Metal stocks led the sectorial rally on a strong outlook supported by rising steel prices and production. Q4 earnings season has started and the market is expected to have a stock centric rally in the coming days which has a very broad positive view.

 

Bears appear to be gaining the upper hand with their counter attacks at higher level as bulls were forced to whipsaw their breakout which otherwise looked to be decisive at one point with an intraday high of 14984 but the selling pressure in the post luncheon session brought down the Nifty towards its opening point which resulted in an indecisive Doji kind of formation.

 

This kind of behaviour on the part of bulls only add to more uncertainty about upside rallies. Hence, in the next trading session, if Nifty trades below 14821 level it shall correct sharply with initial targets placed around 14650 level but that should significantly weaken the bulls' case in the near term.

 

Counter trend, strength can be expected if Nifty manages a strong close above 14900 level. Till then, one should prepare for a sideways trend but with a negative bias.

 

Intraday Traders to short below 14820 level and look for a modest target close to 14700 level. Buying the index should not be considered unless a strong close is witnessed above 14900 level.

 

Sector Wise :- Metal index rose nearly 4 percent, while infra and IT index rose a percent each. However, some selling seen in the banking names. Midcap and Smallcap indices rose over 0.5 percent each.

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