NIFTY 50 EOD ANALYSIS -16-07-21
IN SUMMARY
- Open / High / Low / Close
- 15958.35 / 15962.25 / 15882.6 / 15923. [-0.8 / -0.01%]
- Trading Range Low to High: 80 points
- Likely Max Realistic Opportunity @ 50%: 40 points
- India VIX: 11.71 / -4.56%
- FII DII activities - +200 Crores
NIFTY 50 EOD 16-07-21 DAILY CHART -
NIFTY 5 MINUTE CHART FOR 14-07-21 to 16-07-21
CHART BASED CONCLUSIONS --
- The only consolidation for Nifty was that it made a higher high and higher low and ended flat.
- It appeared that as a mark of respect to the ATH close, Nifty was made to open gap-up and then it never revisited the high and ended on a dull note which also looked to have been index managed.
- The RSI on a daily time frame is giving a flat/stalling sign indicating lack of buyers at higher levels or presence of sellers at higher levels.
- With a flat close, charts do not really indicate much to conclude.
TOP 3 GAINERS
- Divi's Laboratories Ltd. (NS:DIVI) -A strong and clean rise leading it into the higher ATH and when a scrip or index reaches ATH, it should reflect this kind of strength. RSI indicates that there may be some sideways movement before it heads higher.
- Bharti Airtel Ltd. (NS:BRTI) -A strong push-up has forced the breach of the elusive 50 DMA. However, the scrip has the tendency to register Red candles after a green candle so nothing to cheer yet.
- UltraTech Cement Ltd (NS:ULTC) -One more clean and strong push has led it to another ATH close. This is how prices should behave once ATH is hit - keep making higher highs. RSI on daily charts indicates that some more upside is likely before profit booking kicks in.
TOP 3 LOSERS -
- HCL Technologies Ltd (NS:HCLT) -It remained a one-day wonder [as the top gainer] and it could not even test the high for 15-7 and tanked from near the open level. The only saving grace is that it closed above the low of 15-7.
- Eicher Motors Ltd. (NS:EICH) -As mentioned yesterday, it was already in a downward trend and it continued today as well. I am not sure when its results are expected, but clearly, the numbers are unlikely to be good from the price action point of view.
- Bajaj Finserv Ltd (NS:BJFS) -Its candle for 15-7 was an inverted hammer indicating a change of mood and that is what was confirmed today. This may only be profit booking before going in for the release of the numbers.
POSITIVES
- The week has ended above 15900 and that is a good positive sign from a short to medium-term point of view.
- Reliance Industries Ltd (NS:RELI) and ITC (NS:ITC) are the two laggards that move only when they want to, and both closed in good positive. These two helped Nifty remain above 15900.
- HDFC Bank Ltd (NS:HDBK) managed to stay neutral and that also helped the sentiment.
- From a bullish angle, it can be said that bears could not drag Nifty below the earlier resistance of 15880 which now acted as a support.
NEGATIVES
- The Nifty failed to hold on to the higher ground for more than 5 minutes and witnessed selling immediately after the high was hit in the first 5 minutes.
- There seem to be bearish warriors well ahead of the 16000 line that they are not even allowing Nifty to go anywhere near the line.
- Infosys Ltd (NS:INFY) and ICICI Bank Ltd (NS:ICBK) ended up as the key draggers as Nifty kept drifting lower. INFOSYS appeared to have stabilized in the AM session, but in the last couple of hours came under pressure which impacted TCS (NS:TCS) as well.
- HDFC (NS:HDFC) also fell 1% from its high for the day and that also impacted Nifty ability to bounce back.
- FIIs continue to be net sellers so some more weaknesses in store even now.
TRADING RANGE FOR 16-07-21
- 15800-850 remain as the support line and 15950-16000-16025 would be the resistance areas that Nifty needs to negotiate and 16000 is unlikely to come easily unless IT and HDFC twins shake things up.
- No change in Banknifty levels as it yet again turned around from below 36000 and took support above 35600. So 35400-600 is the support and 36000-36200 is the band of resistance.
INSIGHT / OBSERVATIONS --
- HDFC BANK results are due to be released on 17-7 and the price action indicates a good set of numbers. If that happens to be the case, we may see a gap-up opening above the long-standing resistance of 1530-40.
- Nifty Bank is waiting for a trigger to cross convincingly above 36000 and HDFC BANK is a good hope - we have to see if it helps rise or sink.
- With VIX below 12, Nifty options in particular are becoming hard to trade as the rate of change in value has died down due to lack of volatility.
- We are also now witnessing the last week of Nifty lot size 75 as from 22 Jul, the only lot size available would be 50 and that could bring about some changes in the way the prices move.
- DIIs seem to be buying just a bit more than FIIs sell.
P.S. If you choose to comment on the above, please do so with your analytical view rather than merely passing a comment. Your presentation of the view held by you would help other readers as well.
NOTE --
This write-up is not a prediction mechanism for the movement of Indices in the Indian markets as the markets are unpredictable in nature. I may refer to many data points in the article but I do not base my view on any of these standalone. In fact, I prefer to react to the price moves than predict the price moves. I also do not review Open Interest. Whatever data points I am using, are all stated in the article. The article title, as well as its contents, can at best be stated as --- This Is How I Read Nifty. I hope I have been able to set the expectations right.
WHY DO I USE CHARTS?
It is said that a picture conveys 1000 words, and I add, to those who can read the script, and to some others this may not make sense which is fine.