Nifty closed the weekly F&O expiry day with a gain of 66.80 points, or 0.44 per cent, at 15,173. The index hit a high of 15,188 and a low of 15,065 during the day. A long positive candle was formed on Thursday, after the formation of Doji or High Wave type candle pattern.
“Based on Nifty closing, we can conclude that the market is consolidating and would remain volatile between 15,200 and 15,000 levels. Nifty can move above the 15,200 to 15,350. However, in absence of Bank Nifty performance, the market will need strong support from FMCG or IT sector with consolidation and large support available,” said Shrikant Chouhan, EVP, Equity Technical Research at Kotak Securities.
Much of the post-Budget rally has been due to FII piling on stocks after the government unveiled its capex plans. Better-than-expected earnings have also led to buying. Heavyweight Reliance Industries also joined the rally, which bodes well for the market, said other analysts.
Analyst Manish Shah said there has seen a series of tight closes in the last four days, which is a possible tight flag–a continuation pattern.
“Nifty seems to be taking a breather after the sharp run-up it saw post-Budget session. The candle pattern is bullish. After a long bottoming tail pattern on Wednesday, we have a green candle closing at the top end of the range. Momentum indicators are in the buy mode as the MACD is in the buy mode and the RSI is above 60. Moving averages are bullish and sloping up,” said Shah.
He believes Nifty is likely to rally towards 15,500-15,600 range in next 6-8 days.
Some analysts said the ongoing consolidation was much needed after the strong runup in the Budget week. As of now, there are no signs of any deeper retracements and hence, once this consolidation is over they expect the markets to resume its uptrend.
Amid all this, there are ample opportunities to make money in individual stocks.
“Although the indices have not moved much this week, stock-specific action has been strong and provided opportunities for trading. Till the index is locked in this range, traders are advised to look for potential stock-specific movers and trade with proper risk management,” said Ruchit Jain, Senior Analyst – Technical and Derivatives, Angel Broking.
