What A Tug of War - 15500 Vs 15700NIFTY 50 EOD ANALYSIS -28-07-21
IN SUMMARY
Open / High / Low / Close
15761.55 / 15767.5 / 15513.45 / 15709.4
Trading Range Low to High: 180 points
Likely Max Realistic Opportunity @ 50%: 90 points
India VIX: 13.69 / +3.48%
FII DII activities: -1353 Crores
CHART BASED CONCLUSIONS
A mild gap-up opening was expectedly sold in to as Nifty fell more than 80 points in the opening 5 minutes. And then fell like a peck of cards to retest the 15500 crucial support line after 21-6-21.
The index made a sustained and a smart recovery with the usual sell off in the last 90 minutes but it still managed to bounce back and close just above 15700.
This close is around the lows of 27-7 which is now also a resistance.
On the daily charts, Nifty has made a strong bounce back from its 50 DMA with a hammer like candle indicating that the recovery was strong. This may have also been on account of short covering ahead of tomorrow’s monthly expiry.
TOP 3 LOSERS
KOTAK BANK - It fell sharply on the third day after the results were announced. It has tested the area of 1639-50 which is the 50% retracement from its ATH. This move hopefully would have shredded all the negativity that it has been having science the last several weeks.
CIPLA - After having broken its 50 DMA with force, it fell further and is now back in the support zone, but it may get tempted to visit the 50 DMA around 650.
TATA MOTORS - This is what happens when the performance improves but it is a loss and the market sentiment is bearish. The scrip has fallen now in to its support zone of 275-285. Wait and watch for now.
TOP 3 GAINERS
BHARTI AIRTEL - A scrip that was languishing for almost a quarter woke up out of the slumber and became the leader, however, it has straight away walked in to the resistance zone so a follow-up move on the expiry day is essential for it to move ahead.
TATA STEEL - A retest of the low of 27-7 and then the scrip made a new ATH and it has closed also around the ATH. RSI on daily charts indicates that there is some more bullish strength present.
SBI LIFE - And yet another ATH and yet another near ATH close for the scrip on a day when there was mayhem in the market. This is a good sign, however, the scrip may witness profit booking given that the RSI is bit over extended.
POSITIVES
Nifty made an excellent recovery of almost 200 points from the low for the day so the bulls fought back in style for the session.
ICICI BANK led from the front and helped Nifty close above 15700. Though it is still a few points away from its ATH, the move was good ahead of the expiry.
HUL, TCS, ITC and INFY supported the market well when recovery was in process and their combined efforts helped Nifty come out of the bear zone.
NEGATIVES
The very fact that Nifty fell 400+ points from its ATH is a scary thing. The corporate results generally help the market move up, but this quarter, things have changed and one after the other scrip except ICICI BANK has lost heavily soon after the results were announced.
HDFC twins, RELIANCE, KOTAKBANK, and SBIN dragged the market down. When HDFC twins are moving in a different direction, there is little that the other scrips can do except getting influenced by them.
The road ahead is full of hurdles and resistances at every rise so unless the heavyweights perform well, the ride up is going to be hard and tiresome.
TRADING RANGE FOR 29-07-21
Since tomorrow is the monthly expiry, it is hard to give a range especially when the indices could have broken key levels in a tough fight.
Nifty support at 15500 and above and Bank Nifty support at 34000 and above. Resistances are several so will wait for the expiry to play out and then look at the levels for the Aug series.
INSIGHT / OBSERVATIONS
I prefer to wait for a day to write about this as the expiry moves may make a mockery of whatever I may end up writing here. Let us see where the indices end tomorrow and we will take it from there.
Thank you, and Happy Money Making!
Umesh
28-07-2021.
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.
