Market update at 9:58 AM: Nifty opened the session with a positive bias and registered a fresh all-time high as it made a high of 15,778.80. Thereafter, profit booking was witnessed, which has dragged the index near the day’s low. Nifty is down by a quarter of per cent and is hovering close to the 15,700 mark.
Interestingly, the broader market is also witnessing profit booking as Nifty Midcap-100 and Smallcap-100 plunged 0.29 per cent and 0.32 per cent, respectively.
A majority of the sectoral indices were trading in red wherein Nifty Metal and Nifty Bank emerged as the top losers. On the other hand, Nifty IT and Nifty FMCG were the top gainers.
The top five stocks that have witnessed a long build-up are: Torrent Power, REC, Dabur, Mindtree, and Jubilant FoodWorks. On the flip side, around five stocks that saw short build-up are Apollo Hospitals, Adani Enterprises, Hindalco, Dr Lal Pathlabs, and Havells.
When India men's national cricket team captain Virat Kohli was at his peak performance, his routine was like, ‘wake up, score centuries, sleep, repeat’. Similarly, on D-Street, the bulls seem to have entered the same mode, where they open with a gap up, hit a new all-time high, and repeat!
Nifty started the week with a gap-up at 15,725 and after initial volatility, it slowly and gradually moved higher to hit a record high of 15,773 and closed above the 15,750 mark for the first time in history.
The price action of the day formed a small body bullish candle with a lower shadow, which indicates dips were being bought. Interestingly, this was the third day in a row, where we had seen a similar type of candlestick formation. This indicates inherent strength and lack of selling interest at the new highs. Furthermore, the overall market breadth continued to be buoyant.
Though there are no apparent sell indications at the current juncture, a narrow trading range accompanied with RSI entering the overbought region can be a harbinger of weakness going forward, which will be confirmed if Nifty closes below the prior bar. As Nifty did not close below the prior day low since May 20. Hence, going forward, for long traders, it’s important to keep the prior bar low as a trailing stop-loss. Any close below the prior bar low would be an indication that the market would enter into a phase of consolidation.
Hence, the level of 15,622 is likely to act as an important support in the near term while on the upside, the level of 15,800, followed by 15,950-16,000 is likely to act as a resistance in the near term.