Nifty formed a bearish candle that resembled a Hanging Man pattern on the daily chart. On the weekly chart, it continued forming a bullish candle for the third consecutive week. Nifty gained 1.5 percent during the week.
Nifty formed a small bearish candle on daily chart and a bullish candle with higher highs on the weekly chart. It continues its higher highs higher lows formation of the last three weeks.
Nifty opened higher at 15712 and hit an intraday record high of 15733 but 90 minutes into the morning trade, it erased all gains to turn volatile. Nifty closed 20 points lower at 15670.
A Hanging Man kind of indecisive formation hints that the market is stretched on the upside. Some of the momentum oscillators on weekly chart are in overbought zone, while indicators like Weekly RSI failed to maintain pace in line with price chart, indicating some negative divergence and lack of strength in upward momentum.
Nifty consolidated for the most part of the session and closed slightly lower, as the RBI monetary policy committee left key rates unchanged. Banks and select FMCG stocks were under pressure, while auto and metals stocks supported the market.
As markets warmed up to Biden’s Tax proposal amidst encouraging payroll data, all eyes were set on the RBI Policy today morning which as expected held status quo and maintained its accommodative stance. Sensex however flirted around the 52K mark even as the broader market witnessed selective buying interest in Unlock Themes with several states beginning to ease restrictions. Housing & Micro Finance entities were seen buzzing around amidst hectic activity in today's trade.
On Friday Our Equity benchmarks made a cautious start and are managing to trade above their neutral lines as traders remained on the sidelines ahead of the RBI's monetary policy outcome to be announced later in the day. But, soon markets lost their ground and slipped into red territory. In the afternoon session, Indian equity benchmarks continued their weak trade.
If the bulls manage to get past 15782, they would hardly be able to add 150/200points as the next critical resistance seems to be placed around 15932/15982.
It’s critical that the Nifty sustains above 15600 in the next session to retain positive bias as a breach of the level can drag the index to 15459 but a close below 15374 is needed for the bears to gain an upper hand.
As trend appears to be sideways in the 15782/15459 range, Traders should remain neutral by focusing on stock specific opportunities.
Sector Wise :- Except bank and FMCG, all other sectoral indices ended higher. Midcap and Smallcap indices rose over 0.5 percent each.