After the prior week’s up move, a sudden change in market sentiments dragged the indices lower. Nifty commended this week with a downward gap. After making an initial low of 15,736, it recovered some of the early losses to register day’s high at 15,837. However, it again travelled south to make a fresh low at 15,708. The Nifty formed an indecisive candle with a large upper shadow.
On the flipside, the level to watch is right around the 15,600 level, which is intact on a closing basis since 3 June. Sustenance above 15,600 could lead to further consolidation between 15,600-15,900 zones.
Erasing prior week’s entire gains, Bank Nifty lost over 2 per cent. Intraday recoveries remained short lived, finding stiff resistance near the 35,350 zone. Moreover, 92 per cent of the Bank Nifty components ended in the red.
All the sectoral indices ended lower, except for realty and pharma index. Further underperformance in the auto space and mild consolidation in the IT space is possible.
Recommendations
Sell Indigo July futures near Rs 1,785
- Stop loss: Rs 1,822
- Target: Rs 1,720
Multiple failed attempts to sustain above Rs 1,850 dragged the stock lower. Appearance of a bearish candle with identical open and high warrants bearish outlook for the stock from a near-term perspective.
Buy near Rs 470-475
- Stop loss: Rs 453
- Target: Rs 530
In the prior week, the stock surpassed its hurdle zone. Positive follow up action this week indicates resumption of the uptrend.
(Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.)
