Nifty ended in the red on May 18 after two days of gains as investors remained concerned over a steep rise in inflation led by the Ukraine war and prospects of aggressive rate hikes by central banks. Data showed that UK inflation surged to its highest annual rate in the last 40 years.
Nifty opened at 16,318.15 against the previous close of 16,259.30 and touched intraday high and low of 16,399.80 and 16,211.20 respectively. The index finally closed 19 points, or 0.12 percent, lower at 16,240.30.
Among the sectors, the Nifty FMCG index rose 1.25 percent while the pharma index climbed 1.06 percent. Nifty Realty and PSU Bank indices fell 1.75 percent and 1.57 percent respectively. Nifty Bank ended 0.40 percent lower.
"The recent rebound in the global indices is certainly comforting however the lingering geopolitical and inflation worries are still keeping the participants on the edge. Meanwhile, the lack of any positive trigger from the domestic front is further weighing on sentiment. Amid all, the scheduled weekly expiry would keep the volatility high on Thursday. We thus recommend continuing with a cautious stance, with a focus on overnight risk management," said Ajit Mishra, VP - Research, Religare Broking.
Technicals
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said the Nifty formed a small bearish hammer kind of candlestick formation, which indicates a range bound activity in the near future.
"For day traders, 16,200-16,150 levels would act as a key support zone. Above the same, the index could move up to 16,400-16,450. On the flip side, below 16,150, uptrends could be vulnerable and could retest the level of 16,050-16,000,” said Chouhan.
Rupak De, Senior Technical Analyst at LKP Securities pointed out that the Nifty found resistance at the crucial resistance at 16,400 and slipped below before closing with a marginal loss.
"On the daily chart, the index remained well below the short-term moving average. The daily RSI is in the bullish crossover. The trend is likely to remain sideward over the near term. The resistance on the higher end is placed at 16,400. On the lower end, support is visible at 16,000," said De.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in said after yesterday's strong move, such a minor weakness can be considered as an opportunity to create fresh long positions as near term trends may remain positively biased in favour of bulls as long as the index sustains above 15,900.
"In such a scenario, on resumption of the up move, the index can test its 20-days simple moving average, whose value is around 16,635 level. Interestingly, the said average is also falling inside the bearish gap zone of 16,484 and 16,651 level, registered on May 6. Therefore, weakness in the short term support zone of 16,200 – 16,150 will be an opportunity to go long with a stop below 15,900," said Mohammad.
Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.
