Nifty formed a bullish candle for the third day in a row as well as weekly chart, as the closing was higher than opening level.
Nifty opened higher at 10119 and turned volatile to slip to the day's low of 10072 but gained momentum in late morning deals and extended upside to touch an intraday high of 10272 before signing off the session at 10244.
Nifty picked up momentum in late morning deals and extended the rally to close above the 10200 level, largely driven by Reliance Industries and rate sensitive stocks.
Bulls appear to be solidifying their position as the Nifty smartly recoiled from the intra week low of 9726 level, which depicted a decent bullish candle on the weekly chart. With Friday's follow through price action.
It has been good week for the global markets as positive sentiment on reopening the economies overshadowed reports of fresh covid cases in the US and China. Market mood was supported by a gradual resumption in business activities and an earlier than expected normalization in certain consumption sectors.
After the rally in current month, investors need to be cautious in the near-term and watch out for geopolitical developments between India and China on one hand and valuations on the other. Resurgence of covid cases and reports of a second wave of infections are potential risks for the markets.
Nifty makes a fresh breakout above 10328, then the bulls will head to challenge the 200day moving average, the value of which is placed at around 10526, but it can meet some resistance in the 10751/10827 zone.
If the index sustains above the day’s low of 10072, then it shall head to test swing high of 10328 registered on 8th June 20.
On a fresh breakout above 10328, Bulls shall eventually head to challenge the 200day moving average, the value of which is placed around 10917 but before that some resistance can be witnessed in the 10751/10827 level.
Positional Traders to consider booking profits in the next session if the Nifty fails to close above 10328.
Sector Wise :- Except IT and metal other indices ended in the green. Midcap and Smallcap indices rose 1 percent each.
- Someshwar, Technical analyst, Equidius Research