By Anand James
Through the final week, bulls and bears traded blows, however twenty seventh May’s break free from the month-long consolidation inspired bulls to play a powerful up transfer. Nifty’s sharp bounce again in March, after testing lows related that of May additionally backed the surmise that an uptrend aiming the 200D SMA of 17269 might unfold. However, after a sizeable leap, albeit temporary, imply reversion transfer unfolded on 2nd June, quickly after testing the 60D SMA suggesting that bulls don’t wish to get forward of themselves, given the occasion dangers forward, by means of RBI fee determination on the eighth of this month, in addition to US NFP knowledge, which serves as a number one indicator in the direction of Fed determination later this month.
With Tesla’s potential layoff including refrain to recession fears, and a number of other funding banks preferring China over India at current valuations, the prospects of 17200 and extra must be re-evaluated. The finest gauge is to have a look at how merchants have already positioned themselves for the weekend. Nifty name merchants boosted their shorts in OTMs so far as 17300 and 17500 within the second half of Friday, which is a premium scalping play relatively than a directional one, particularly with a full week to expiry.
Further, VIX, a measure of volatility, fell 1.7% regardless of Nifty registering a 228 level fall from the day’s high and shutting close to the day’s low. Meanwhile, RSI of small caps are nonetheless beneath 50, suggesting there are not any froth or overbought conditions but, which might have in any other case referred to as for a panic liquidation. And, regardless of such a steep fall in Nifty, 67% of NSE500 shares closed above Thursday’s excessive, suggesting that sentiments haven’t turned dangerous, simply cautionary.
The 16460-400 area in Nifty will proceed to be a catchment space for dips, and favoured view expects the identical to carry for a two stepped uptrend to unfold, aiming 16950 first and 17200 subsequently. Alternatively, a slippage previous 16140 will power us to change sides, although our expectations in the direction of such an final result subsequent week is low.
(Anand James, Chief Market Strategist at Geojit Financial Services, Views expressed are the writer’s personal.)
Source: www.financialexpress.com”