Nifty 50 EOD ANALYSIS 06-07-21
IN SUMMARY
- Open: 15813.75
- High: 15914.2
- Low: 15801.00
- Close: 15818.25 [ -16.1 / -0.10%]
- Trading Range Low to High: 113 points
- Likely Max Realistic Opportunity @ 50%: 56.5 points
- India VIX: 12.28 / +1.74%
- FII DII activities - Not yet updated till the release of the article [but likely to be negative]
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.
NIFTY 50 EOD 06-07-21 DAILY CHART -
NIFTY 15 Minute Chart for 23-6-21 to 06-07-21
CHART BASED CONCLUSIONS --
- After a mild gap-down opening, the index immediately recovered and steadily rose throughout the day and reached close to the ATH around 1400h.
- Soon thereafter, there was a sudden and sharp sell-off and it fell more than 100 points, possibly triggered by the news related to Tata Motors (NS:TAMO).
- The steady rise of 80 odd points was good despite the VIX being below 13.
- However, on a closing basis, it appears as if nothing has happened. Except for the fact that Nifty has formed an inverted hammer even though the volume is not significantly high.
- The fact that Nifty could gather support from 15800 areas from were many times earlier as well it has taken support, is a good thing.
TOP 3 GAINERS
- UltraTech Cement Ltd (NS:ULTC) - The scrip took support from around 50 DMA and made a strong up move with reasonable volumes. Similar moves have resulted in further up moves in the past so it needs to be seen whether this move also follows suit. It is also closer to the ATH as well as pre-ATH resistance levels.
- Shree Cements Ltd. (NS:SHCM) - Another scrip from the same sector and with good volumes. However, this one is now having 50 DMA as a resistance. So clearly, it may have a tough time before it can climb further.
- HDFC Bank Ltd (NS:HDBK) - After several sessions, the lion has roared and in style breaking out of the cluster of resistances. This movement alone would have helped Nifty breathe above 15800 and would have also helped neutralize the negativity that came in from Reliance Industries Ltd (NS:RELI).
TOP 3 LOSERS
- Tata Motors Ltd (NS:TAMO) - All the price action that happened between 21-05-21 and 06-07-21 was wiped out in a news based trigger that rocked the scrip to such an extent that it hit the lower circuit. The volume is unreasonably high and from a point where it would have hit the ATH to the point where it hit the lower circuit was a long and rocky journey.
- Tech Mahindra Ltd (NS:TEML)- A repeat customer at the spot. As mentioned yesterday, there is some inherent weakness that is bugging the scrip. Though it is around a mini support base, a dash to 50 DMA may be possible [1020-25].
- TCS (NS:TCS) - Another scrip that is probably pricing in some negatives in the Q1 numbers and it has closed just above the FIB support level of 3245-50. With its results due on 08-07, the next two sessions’ price action could be quite interesting.
POSITIVES
- Despite a sharp sell-off in non-banking and IT heavyweights, Nifty managed to close above 15800 which is a big positive.
- Banking heavyweights - HDFC (NS:HDFC) BANK, ICICI BANK, KOTAK BANK led from the front and have helped Banknifty outperform Nifty today.
- Banknifty managed to close above 35500 is a big positive so once the negativity in Nifty subsides, we may see some good moves on the way up.
NEGATIVES
- The negative sentiments conveyed by TATA MOTORS had an impact on others as well - MARUTI, M&M in particular also came under pressure.
- IT sector is witnessing continued pressure and even INFOSYS could not hold on to higher levels and end up in the red.
- Such negativity in scrips other than TAMO is unusual when Nifty was just a point and a fraction away from the ATH.
- 15835-850 may yet again act as the first resistance to be tackled.
TRADING RANGE FOR 07-07-21
- The support is maintained at - 15750-800. The earlier resistance band of 15835-850 is active again. 15900-925 would be the next frontier to cross if Nifty has any intentions of reaching 16000 this week.
- For Bank Nifty, the support zone moves up to 35000-35200 and the resistance is 35800-36000.
INSIGHT --
Nifty 15800 CE premium decay was faster than its appreciation. Maybe this is on account of huge Option Writing actions.
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.