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MUMBAI, April 17 (www.GoldTradingCalls.com) The nine-week NSE Nifty Index market rally finally came to a halt owing to profit-booking in financial and energy shares. The Sensex, which has surged nearly 13 per cent, or over 2,000 points, between February 5 and April 9, finally ended with a loss of 2 per cent at 17,591.
NSE Nifty Index moved in a range of 109 points, from a high of 5,382, the index dropped to a low of 5,238, and finally ended with a loss of almost 100 points at 5,263.
Profit-taking took place mainly on account of nervousness ahead of the RBI credit policy review early next week. The markets expect the central bank to raise rates given the rising inflation. However, the quantum of rise is the main concern.
The markets were edgy right from the start of the week, and slipped lower as the week progressed. Among the index stocks – Hero Honda was the major loser – down nearly 7 per cent at Rs 1,920. HDFC, ICICI Bank, Reliance Communications, Sterlite, Mahindra & Mahindra and Larsen & Toubro were down 4-6 per cent each.
On the other hand, Infosys surged 4 per cent to Rs 2,786, following positive guidance for FY11. TCS too rallied nearly 3 per cent. Tata Steel and Hindustan Unilever were the other prominent gainers.
Market Technicals
Both Sensex and Nifty has made a lower high and low on the weekly charts, and ended fairly below its short-term support of 17,700. Going forward, this level is now going to act as a resistance. NSE Nifty is likely to gain downward momentum in the coming days.
NSE Nifty – Breadth Indicators
NSE Advance- Decline-Line has made a lower top making a clear case of divergence with NIfty index. Even the NSE Net-monthly-high-lows too have peaked out which confirms Markets participants interest waning and confirms distribution at the top having completed and downward momentum to gain in the days to come.
Our Inhouse Nifty Trading System based on Quant Forecast in BLUELINE is Superimposed on price chart clearly shows that NSE Nifty Index has completed it Intermediate top at 5394 and has commenced a downtrend for the next few weeks. We advice readers to base their Nifty trading strategy on the short side. Same hold good for stocks trading based on technical analysis and refrain from trading positions/ Nifty stock tips on the long side.
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