HDFC Securities says that Indian equity benchmark indices rose for a second day on May 18, tracking most Asian peers and closed at a two month high. Nifty opened with an upgap and made a 94 point high-low range for the day. At close, the Nifty 50 Index added 1.2% or 185 points to close at 15108. Volumes on the NSE were above recent average. Among sectors, Capital Goods, Consumer Durables, Power and Auto rose the most while Telecom and FMCG fell. Midcap index outperformed the Nifty.

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Asian stock markets were mostly sharply higher on Tuesday, on bargain-hunting from the recent global market falls amid continuing pessimism about the coronavirus pandemic, on surging commodities prices and the easing U.S. dollar (near 3 month low). Nifty breached the earlier resistance of 15044 with an upgap and closed with sharp gains. Advance decline ratio was also positive. The next resistance for the Nifty is at 15186-15240 while the support for the near term could come in at 14938-14988. Falling new cases of Covid-19 and faster recoveries has raised hopes that the second wave is now on a decline mode and India shall soon be back on the normal growth path. 

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Nifty continued with an excellent upside momentum on Tuesday, after showing a sharp upmove on Monday and closed the day with smart gains of around 184 points. After opening on an upside gap of around 144 points, the market continued to show upside momentum amidst a range movement for the entire session. Minor intraday dips were used to move up and the market closed near the highs. The opening upside gap remains unfilled, says HDFC Securities.
 
A small positive candle was formed with a sharp opening upside gap with minor upper and lower shadow. Technically, this pattern indicates a display of sharp upside momentum in the market. Nifty has challenged the key upside resistance and also the upper area of broader higher range around 15000 levels and closed higher. The positive chart pattern of smaller degree like higher top and bottom is intact and Tuesday's swing high of 15137 could be considered as a new higher top of the sequence. But, HDFC Securities need confirmation of reversal from the highs to call this as a higher top reversal pattern.
 
Conclusion: The short term trend of Nifty continues to be positive. The unfilled opening upside gap and a formation of small positive candles could hint at a possibility of profit booking emerging from the highs. Hence, bulls need to be cautious at the swing highs. Nifty not showing any profit booking in the next couple of sessions could open the next upside levels of 15450-15500 in the near term. Immediate support is placed at 15000 levels.