NIFTY closes up 109.30 Points at 5808.40 - Indsec Securities & Finance

The Nifty closed the day positively up ny 109.30(1.91%) points at 5808.40 from 5699.10 Thursday, on the back of flat volumes. Major loser in Nifty were Indusind Bank (1.37%), Hero Motocorp (-0.51%) and Hindustan Unilever (0.18%) whereas major gainers were Hindalco (+7.08%), Tata Motors (+4.89%) and Reliance Infra (+3.99%).

The volume in the cash market for both NSE and BSE put together was up 1.00% to Rs. 118.90 bn from Rs. 117.20 bn. The advance/decline ratio stood at 2.08:1 from 0.38:1 for stocks traded on NSE.

As predicted Nifty on the hourly chart completed AB=CD pattern at 150% extension of swing high/low. Another important observation on hourly chart is with regards to RSI(14) retracement, which is almost 100% against price retracement of 27.2% from yesterday's low. This indicates selling pressure at higher levels. Besides this the premium between the cash and futures prices has come down to almost nil from high of 20 just a few days back.

All these things are indicating selling pressure at every rise and whether the market will sustain or not will be clear next week. The Nifty on the daily chart has formed positive island reversal pattern indicating short term trend reversal. It has potential to test lower levels of 5765 - 5695 - 5640 – 5565 next week.

The Nifty on the weekly chart continued to remain negative with fourth straight week in a row. The RSI(14) on the weekly chart has closed below 50 level indicating selling pressure going forward.

Source : Equity Bulls

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