The market showed smart recovery from the day's low and closed with moderate losses on the first day of the new monthly F&O series, July 1, extending downtrend for the second consecutive session. Oil & gas stocks pulled the market down after windfall gain tax was imposed on oil producers but the buying in FMCG, IT, banking and financial services stocks curtailed losses significantly.
The BSE Sensex fell 111 points to 52,908, while the Nifty50 declined 28 points to 15,752 and formed a bullish candle that resembled a Hammer pattern on the daily charts. On the weekly scale, it formed a bearish candlestick, as the closing was lower than the opening level though the index gained a third of a percent.
"Nifty50 smartly recovered from the intraday low of 15,511 levels to register a Hammer kind of formation on the daily chart. However, on the weekly charts, it appears to be staring at a bearish gap zone of 15,886 and 16,172 levels," Mazhar Mohammad, Founder and Chief Market Strategist at Chartviewindia said.
Hence, unless Nifty absorbs the supplies emanating from the said bearish zone, with a close above 16,172 levels, a sustainable up move shall not be expected, he said.
The market expert feels for a long-side trade from the current levels, technically, the stop-loss level remains below 15,511, which may not deliver a favourable risk-reward ratio as initial resistance is placed around 15,900 levels.
Hence, he advised traders to wait for more signs of strength for a long-side trade.
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