The market edged lower in early trade reacting to three serial bomb blasts in Mumbai on Wednesday evening. A bout of volatility was witnessed as the key benchmark indices trimmed losses after hitting fresh intraday lows in morning trade. The market further trimmed intraday losses in mid-morning trade. The market moved into the positive zone in early afternoon trade before surging in the afternoon trade. The indices trimmed gains after hitting fresh intraday high in mid-afternoon trade. High volatility was witnessed in late trade as the key benchmark indices gave up strong intraday gains. The Sensex and Nifty closed with gains of 0.1% and 0.3%, respectively. The mid-cap and small-cap indices closed with gains of 0.4% and 0.2%, respectively. Among the front runners, DLF, Tata Motors, Cipla, ICICI and SBI gained 1–3%, while TCS, Infosys,RCOM, Bajaj Auto and ONGC lost 1–2%. Among mid caps, SpiceJet, PTC India, Supreme Inds, Cholamandalam Investment and Finance, and IRB Infra gained 5–8%, while SKS Microfinance, GSPL, Godfrey Philips, Himadri Chemical and KGN Industries lost 3–10%.
Markets Today
The trend deciding level for the day is 18,596/5,584 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18,866–19,114/5,670–5,741 levels. However, if NIFTY trades below 18,596/5,584 levels for the first half-an-hour of trade then it may correct up to 18,348–18,079/5,513–5,427 levels.
The indices have closed in the upper end of the intraday range as the bulls were able to offer follow up support at lower levels during session. The intraday range specified for the Nifty between the 5670 / 5500 held as the Nifty trended within these levels, thereby validating our intraday levels. The coming session is likely to witness resistance at the 5660 levels on advances. Support is likely at the 5525 levels. The bullish pivot for the session is likely at the 5620 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5580 levels below which declines may occur. Traders must watch these levels for signs of trend determination in the coming session.
The daily candle chart of the Nifty shows a smaller bodied bullish candle which managed to close an open "window" (gap) successfully. The large wicks (shadows) indicate a lack of sustained buying conviction. The downward sloping trendline remains in the reckoning as a stiff resistance for the bulls. The Nifty (spot) must stay above the 5620 levels sustainably with volumes and open interest expansion to rally intraday on Friday. On the flip side, sustaining below the 5580 levels may trigger a fresh bout of declines. Being a weekend session, we anticipate a calibrated buying momentum, especially towards the end of the session.
The market internals indicate a higher turnover due to the short covering conviction. The number of trades were higher and the average ticket size per trade was higher, which indicates retail participation. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears ramping up their shorts on advances.
The outlook for the markets on Friday is that of guarded optimism as long as the bulls keep the Nifty above the 5620 levels sustain ably. The weekend factor will weigh on the markets.
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