"Nifty is slightly overbought after its rise from 2660 to 2873 in last 3 trading sessions & there is possibility of further decline to 2750-2690. However, close above 2865 may negate the short term bearish outlook. " Nifty opened with a downward gap of more than 50 points on negative cues from global markets. However, smart recovery in most of the sectors strongly pushed Nifty to touch an intra day high of 2881, up by 107 points from intra day lows. The recovery was led by Reliance Inds. which moved up by nearly Rs.100/- to lift the indices to a respectable close.
As far as, EST charts are concerned, Nifty has not achieved the bearish target of 2750-2685 & now Nifty faces strong resistance at 2875-2880. Successful bullish breakout may target 3050+ in coming days whereas failure to cross this level can push the Nifty down to 2550 with supports at 2775 & 2663.
As far as Bar reversals in Daily Charts are concerned, Sensex, Nifty, Reliance, L&T, ICICI Bank, SBI, Reliance Capital, Bharti, Suzlon etc have given Upward Bar Reversal in Daily Charts while very few stocks like Educomp, Tata Tea, IOB, GNFC etc have given "Downward Bar Reversal"
Sector wise, most of the infrastructure, sugar, IT, fertilizer, shipping, power, auto, aviation, metal stocks were in positive zone whereas select pharma, auto, media stocks were down due to profit booking. As far as A/D data is concerned it was in favor of bulls in the ratio of 7:4 with 439 declines & 749 advances during the day.
In nutshell, Nifty is making a bullish pattern in hourly charts having resistance at 2875-2880, breakout from where Nifty may target 3000- 3050 with EST Resistance @ 2950 in coming sessions where as failure to cross this level can target 2550 in coming weeks. The best strategy should be to concentrate on stocks which have already given bullish breakout in hourly charts & book profit in stocks which have already achieved the bullish targets or which are in overbought zones.
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