Follow-up buying seen emerging in market
The index consolidated in a range throughout the day and ended around the 11700 mark.
Tracking the mixed cues from the Asian peers, the market witnessed lacklustre trade, with the benchmark indices closing lower for the second consecutive day amid liquidity crisis and weak global cues.
The Sensex fell 71.53 points to 39,122.96 and the Nifty declined 24.40 points to 11,699.70. The Nifty Midcap and Smallcap indices dropped 0.4 per cent each.
UPL, Yes Bank, M&M, Indiabulls Housing and TCS were top gainers, while JSW Steel, ONGC, Eicher Motors, Tata Steel and Vedanta fell 2-3 per cent.
Reliance Power, PC Jeweller, IFCI, Glenmark Pharma, Mahanagar Gas, IGL, Gujarat Gas, Motherson Sumi, Cadila Healthcare, Edelweiss FInancial and Dish TV were down 3-12 per cent.
The index consolidated in a range throughout the day and ended around the 11700 mark.
Technical View
“As mentioned in our previous report, the Nifty seem to have formed a support base in the range of 11650-11630 as we had witnessed buying emerging in this range during last week. Last two trading sessions have retraced some of the recent gains and if we analyse the lower time-frame charts, the index has retraced about 78.60 per cent of the previous up-move around today's low of 11670. Tomorrow's move could be crucial as a follow-up buying could lead to a near-term positive momentum towards 11820-11850. Hence, traders are advised to avoid taking contra bets and trade with a positive bias till the earlier mentioned support is intact,” Ruchit Jain, Equity Technical Analyst, Angel Broking.
Amongst the sectorial indices, the BankNifty has indicated some outperformance in last few trading sessions. Hence, stocks from this sector, along with some quality midcaps, are likely to give some decent moves near-term.
“The Nifty witnessed a choppy trend today, after the weakness of Friday, and closed the day lower. A small body negative candle was formed today with minor upper and lower shadow. Technically, this pattern signals a narrow range movement in the market with a weak bias. Nifty is currently placed near the key lower support of 11,650-600 levels, which is an upper area of previous opening upside gap of 20th May,” said Nagaraj Shetti–Senior Technical & Derivative Analyst, HDFC Securities.
“The short-term trend of Nifty is choppy with a weak bias. A lack of strength in the downside momentum near the supports (11650-11600 levels) is expected to allow bull's to make a small comeback from the lows in the next one-two sessions,” he added.
Market View
"Consolidation is continuing as investors are waiting to hear concrete measures from the government to support the weakening economy. Lack of triggers and premium valuation are impacting new investment while delay in monsoon and F&O expiry may add to volatility,” said Vinod Nair, Head of Research, Geojit Financial Services.