Expect Nifty to move towards 200 WMA - Alex Mathews

Even though in green, markets came to close near to the lowest point of the day. After opening with an upside note, Nifty climbed back above 5300 during the day but it could not hold on to the gains made during the day and slipped erasing most of the gains. It was a mere technical rebound from the 5200 levels. In the morning session we saw value buying happening in most of the stocks which had lost ground yesterday. The market breadth was positive. On BSE, 1,383 shares advanced while 1,238 shares declined. A total of 133 shares remained unchanged. The breadth had swung between positive and negative zone earlier in the day.

Nifty today rebounded on technical grounds. But the underlying trend is still negative. On weekly charts, Nifty has made a head and shoulder pattern and if it falls below the shoulder level of 5172, then we may see Nifty moving towards its 200 weekly moving average of 4815 levels.

Sectors like IT, oil, Healthcare, technology etc gained while rate sensitive sectors like auto, banking, realty etc lost ground. Realty and construction stocks are taking the hit as rains have started leading to less construction activity and hike interest rates are holding back people from buying new homes. Metal stocks saw some buying as metal prices moved up on LME. Precious metals and crude moved up today with gold above $1540 and crude above $94. We also saw buying in textile stocks like Vardhman textiles, Alok industries, Hanung toys etc as cotton prices declined sharply.

Asian had rebounded from the other day’s selling as concerns over Greece debt crisis eased after the leader of the group of Euro area finance ministers assured at arriving at a solution. The European markets were trading positive ahead of the widely awaited vote in the Greek parliament. During the day the German ZEW Economic sentiment fell to -9 against 3.1 but was ignored by the market. Later in the day we are expecting the US existing home sales. US index futures are trading positive indicating a positive opening for DOW.

Source : Equity Bulls

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