Nifty closed 80 points lower than its opening level and formed a bearish candle on daily chart after two successive days of the Doji formation.
Nifty started off at 10382 and hit an intraday high of 10401 but erased gains in the afternoon trade to hit the day's low of 10267.
Nifty opened sharply higher but wiped out the gains in the last 90 minutes of trade to close with a moderate loss despite a strong show by other Asian markets. Indian market seems to be worried about economic recovery after several states extended lockdown till July 30 as coronavirus cases continue to rise.
In Spite of trading positive for most part of the day, the benchmark indices gave up its gains and ended flat with a negative bias. The markets were impacted by the uncertainties surrounding PM’s address to the nation. Irrespective of this, many Indian cities, are extending their lockdowns in the face of unabated growth in virus infections, which has added to the uncertainty surrounding economic recovery. The market direction for tomorrow may also largely be guided by the content of the PM’s address and global cues.
Nifty continued its lackadaisical style of trading for the fourth session in a row as trading remained in a narrow range of 133 points before signing off the session with a bearish candle.
With the last four sessions seeing narrow ranges and almost indecisive formations, the Nifty appeared to be positioning itself for a breakout in either of the directions.
Nifty breaches the trend line support, placed around 10195 level, on a closing basis then it can accelerate the selling pressure. In that scenario, a range target close to 9800 can be projected.
Given the continuous consolidation, the market could be preparing for a breakout on either side from its current range of 10194/10520.
Positional traders to short the Nifty if it closes below 10194 and look for a target of 9860.
Mixed trend seen on the sectoral front, with auto and FMCG ended higher, while selling seen in the energy, pharma and infra space. Midcap and Smallcap indices ended lower.