HDFC Securities says Traders should sell Nifty on rise around 14450-14500
HDFC Securities says that Indian benchmark equity indices recovered smartly on April 22 after opening lower and making an intra day low in the first 5 minutes of trade. Focussed buying in Banks helped Nifty recover later in the day. Despite a surge in Corona cases, traders went in for bottom fishing on the weekly F&O expiry day, reversing a streak of two day loss. At close the Nifty ended 0.77% or 109.8 points higher at 14406
HDFC Securities says that Indian benchmark equity indices recovered smartly on April 22 after opening lower and making an intra day low in the first 5 minutes of trade. Focussed buying in Banks helped Nifty recover later in the day. Despite a surge in Corona cases, traders went in for bottom fishing on the weekly F&O expiry day, reversing a streak of two day loss. At close the Nifty ended 0.77% or 109.8 points higher at 14406. Volumes on the NSE were in line with recent averages. Among sectors, Banks, Metals and Realty were the main gainers while FMCG and Consumer Durables were the loss leaders.
HDFC Securities highlights that Global stocks inched higher while oil fell on Thursday as investors wondered whether to bet on economic recovery in the United States and other developed markets or worry about a surge in COVID-19 cases in India and elsewhere. The European Central Bank is also scheduled to deliver its latest monetary policy announcement, although no major changes are expected.
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Nifty after making a new low of 14151, has made a bullish piercing pattern on April 22. However crossing 14526 will be crucial for any further upmove. Advance decline ratio is in the positive suggesting that investors are comfortable holding on to and buying small and midcaps ahead of the results season, says HDFC Securities
HDFC Securities explains that after showing sharp sell on rise on Tuesday, Nifty witnessed an upside bounce again from the support of 14200 levels on Thursday and closed the day higher by 109 points. Nifty opened on a downside gap of 77 points and slipped further into weakness after the opening. A sustainable intraday upside recovery has emerged from the day's low of 14151 and the upside momentum was seen in the afternoon to later part of the session. Intraday minor declines were used as buy on dips opportunity for the day.
HDFC Securities says that Nifty on the intraday chart like 60 mins time frame is placed to form yet another lower top around 14425-14450 levels. The Intraday chart pattern of the last four sessions signal a formation of descending type triangle pattern (consistent lower highs and repeated hitting of lower support). This pattern could indicate chances of another sell on rise in the next few sessions and the revisit of lower support at 14150-14200 levels again in the near term.
Conclusion: The short term trend of Nifty seems to have reversed up from the lows. But the fear of sharp sell on rise still persists until 14560 level is surpassed decisively on the upside. The intraday chart setup could signal a possibility of another sell on rise around 14450-14500 levels in the next 1-2 sessions.
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