IGI Logo

Some respite for the bulls in the offing - HDFC Securities 

Major US equity indexes managed to post a gain on Thursday in volatile trading session as weekly first-time jobless claims hit the lowest level in over a year.

Economic data showed that the number of people seeking unemployment benefits for the period ended March 20 totaled 684,000, marking the first time the number has been below 700,000 since March.

Financials lead the way amid a modest increase in Treasury yields following a disappointing 7-year Treasury auction. Investors rotated out of growth-oriented stocks, particularly the Information Technology sector, and into value and cyclicallynatured issues, notably the Financials and Energy sectors. Weighing on sentiment was a sell-off in Chinese technology shares amid concerns that they will be delisted from U.S. exchanges on worries about a semiconductor shortage.

The dollar index hit its highest level since November overnight, at 92.7, breaking past its 200-day moving average. Oil futures retreated 4.3%, Gold futures ended lower to end at $1,725 an ounce. In Europe, the Stoxx 600 index was flat while London’s FTSE 100 closed 0.6% lower.

Indian markets

After opening on a mildly positive note, Nifty witnessed a sharp selloff in the second half. Nifty closed near the lows and lost 224 points to close at 14324. Broad market indices like the Mid Cap and Small Cap indices were also struggling & lost 2.14% and 2.04% respectively.

Some of the recent selling can be attributed to year-end adjustments on the capital gains tax front. We could see some more of those moves today as well as Indian markets are closed on Monday to celebrate the festival of Holi. If Nifty closes below the level of 14529 today, that will confirm a lower bottom on weekly charts and portend further weakness in times to come.

Markets will bounce at the opening today, in-light of favorable global cues, providing some respite to bulls. Nifty faces stiff resistance at 14470 on the rise, while 14280 will act as a support.

Daily Technical View on Nifty

Nifty Confirmed Lower Top Lower Bottom

Nifty plunged 1.54% to close at 14325

This is lowest close for Nifty since 22nd Jan 2021

Nifty has confirmed the lower top lower bottom formation on the daily chart

Weekly close below 14529 would also confirm lower bottom on weekly line chart basis Nifty has also violated the crucial upward sloping trend-line support on the weekly charts. This trend line adjoins the weekly bottoms since March 2020

Nifty has sustained below its 50 days EMA Next Support for the Nifty is seen at 14000 odd levels, where 100 days EMA placed Weekly RSI has exited the overbought zone with lower tops and lower bottoms Weekly MACD has reached below signal line for the first time since week ended 5 th June 2020. ADX on the daily chart has cut +DI on the upside and marching towards equilibrium line, which indicates rising bearish momentum Traders should utilize any intraday bounce to exit long positions. Trend of the Nifty has turned bearish.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer