NIFTY 50 EOD ANALYSIS -05-08-21
IN SUMMARY
Open / High / Low / Close
16288.95 / 16349.45 / 16210.3 / 16294.6
Trading Range Low to High: 139 points
Likely Max Realistic Opportunity @ 50%: 69.5 points
India VIX: 12.87 / --2.57%
FII DII activities: +12 Crores
CHART BASED CONCLUSIONS
Nifty made yet another gap-up opening and yet another ATH close.
Another Higher High and Higher Low is a good sign.
Interestingly, Nifty has now 2 resistances - 16350 and 16300. Today, expiry pressure may have led it to close below 16300 as well.
Tomorrow is RBI policy so till then it is likely to be range bound and then the key point is whether Nifty can close the week above 16300.
On daily charts, it has formed a Doji pattern indicating indecisiveness which is understandable in the now not so familiar zone.
TOP 3 LOSERS
SBI - After declaring a good set of numbers, SBI dragged the indices with a big red candle and it may go down to its 20 DMA which is still a few points away. The good point is that on the decline, the volume is not high as compared to what it was yesterday.
INDUSIND BANK - It gas been forming candles of all types and is all over within a range. It would be able to breakout or break down only when this range is broken above 1050 or below 950-60.
BAJAJ FINANCE - A scrip that moves in an inconsistent manner, had a big red day as it took resistance from the earlier close and ended the day near the day low. This was preceded by an inverted hammer yesterday so negativity is likely to bring it down to retest 20 DMA which is just a few points away.
TOP 3 GAINERS
BHARTI AIRTEL - One man’s loss is another man’s gain. This is what sums up its roar today as Kumar Mangalam Birla stepped down as the Chairman of Vodafone Idea. It took the scrip back into the pre-Covid resistance zone and as of now, it has faced the resistance . The volume is good so it may reattempt to cross the line. Wait and watch for now.
EICHER MOTORS - It made a strong move after clearing the 20 DMA line and is heading higher. There is something about the scrip that is taking it higher especially when most of the key Auto scrips were suppressed.
ITC - The sleeping giant took support from 20 as well as 50 DMA and jumped sharply and is now in the resistance zone yet again with the difference that this time it has good momentum as well as volumes to support so it may well be able to clear the zone in the coming days.
POSITIVES
ITC, RELIANCE & HDFC BANK performed well today which helped Nifty to stay in the green.
HDFC BANK jumped past 1500 level but the expiry trades may have dragged it in the closing minutes.
RELIANCE emerged like ITC from the archives but faced its strong resistance and that made the scrip slide back almost 1% from its high of 2154. It along with HDFC BANK now holds the key for the indices.
DIIs have matched FIIs selling so the DOJI pattern is explained.
NEGATIVES
SBI and ICICI BANK underperformed today which dragged Bank Nifty below 36000.
FIIs turned net sellers on the 3rd day itself so it appears that they do not seem to be sure about what is in store ahead.
HDFC also witnessed some weakness and accompanied by MARUTI and M&M prevented Nifty from closing above 15300-350.
TRADING RANGE FOR 0-08-21
As of now, the indices are on the run so I prefer to wait for them to settle down for the week before working on any levels as from hereon till some time, heavyweights could decide which way and how far the indices could be move.
INSIGHT / OBSERVATIONS
I find it very hard to see that Nifty hit another ATH today and yet several of its key constituents are well below their ATHs and some are struggling to come out of the slumber. I view this as a double-edged sword kind of situation -
The good part is - if many heavyweights are still underperforming, Nifty would be able to scale even higher when they start performing.
The not-so-good - It means that this rally is driven by a few stocks only and for a market to be stable and upwardly mobile it should have broad market participation.
What do you think?
Thank you, and Happy Money Making!
Umesh
5-8-21
P.S. If you choose to comment on the above, please do so with your analytical view rather than merely passing a comment. Your presentation of the view held by you would help other readers as well.
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
IN SUMMARY
Open / High / Low / Close
16288.95 / 16349.45 / 16210.3 / 16294.6
Trading Range Low to High: 139 points
Likely Max Realistic Opportunity @ 50%: 69.5 points
India VIX: 12.87 / --2.57%
FII DII activities: +12 Crores
CHART BASED CONCLUSIONS
Nifty made yet another gap-up opening and yet another ATH close.
Another Higher High and Higher Low is a good sign.
Interestingly, Nifty has now 2 resistances - 16350 and 16300. Today, expiry pressure may have led it to close below 16300 as well.
Tomorrow is RBI policy so till then it is likely to be range bound and then the key point is whether Nifty can close the week above 16300.
On daily charts, it has formed a Doji pattern indicating indecisiveness which is understandable in the now not so familiar zone.
TOP 3 LOSERS
SBI - After declaring a good set of numbers, SBI dragged the indices with a big red candle and it may go down to its 20 DMA which is still a few points away. The good point is that on the decline, the volume is not high as compared to what it was yesterday.
INDUSIND BANK - It gas been forming candles of all types and is all over within a range. It would be able to breakout or break down only when this range is broken above 1050 or below 950-60.
BAJAJ FINANCE - A scrip that moves in an inconsistent manner, had a big red day as it took resistance from the earlier close and ended the day near the day low. This was preceded by an inverted hammer yesterday so negativity is likely to bring it down to retest 20 DMA which is just a few points away.
TOP 3 GAINERS
BHARTI AIRTEL - One man’s loss is another man’s gain. This is what sums up its roar today as Kumar Mangalam Birla stepped down as the Chairman of Vodafone Idea. It took the scrip back into the pre-Covid resistance zone and as of now, it has faced the resistance . The volume is good so it may reattempt to cross the line. Wait and watch for now.
EICHER MOTORS - It made a strong move after clearing the 20 DMA line and is heading higher. There is something about the scrip that is taking it higher especially when most of the key Auto scrips were suppressed.
ITC - The sleeping giant took support from 20 as well as 50 DMA and jumped sharply and is now in the resistance zone yet again with the difference that this time it has good momentum as well as volumes to support so it may well be able to clear the zone in the coming days.
POSITIVES
ITC, RELIANCE & HDFC BANK performed well today which helped Nifty to stay in the green.
HDFC BANK jumped past 1500 level but the expiry trades may have dragged it in the closing minutes.
RELIANCE emerged like ITC from the archives but faced its strong resistance and that made the scrip slide back almost 1% from its high of 2154. It along with HDFC BANK now holds the key for the indices.
DIIs have matched FIIs selling so the DOJI pattern is explained.
NEGATIVES
SBI and ICICI BANK underperformed today which dragged Bank Nifty below 36000.
FIIs turned net sellers on the 3rd day itself so it appears that they do not seem to be sure about what is in store ahead.
HDFC also witnessed some weakness and accompanied by MARUTI and M&M prevented Nifty from closing above 15300-350.
TRADING RANGE FOR 0-08-21
As of now, the indices are on the run so I prefer to wait for them to settle down for the week before working on any levels as from hereon till some time, heavyweights could decide which way and how far the indices could be move.
INSIGHT / OBSERVATIONS
I find it very hard to see that Nifty hit another ATH today and yet several of its key constituents are well below their ATHs and some are struggling to come out of the slumber. I view this as a double-edged sword kind of situation -
The good part is - if many heavyweights are still underperforming, Nifty would be able to scale even higher when they start performing.
The not-so-good - It means that this rally is driven by a few stocks only and for a market to be stable and upwardly mobile it should have broad market participation.
What do you think?
Thank you, and Happy Money Making!
Umesh
5-8-21
P.S. If you choose to comment on the above, please do so with your analytical view rather than merely passing a comment. Your presentation of the view held by you would help other readers as well.
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
