Closing Bell: Indices end in the red, Nifty around 18,000; financials, IT top losers

Patil, Technical Analyst, SAMCO Securities

The Nifty-50 index has formed on the daily chart a Falling three-candle stick pattern and which is immediately followed by another bearish candle stick pattern termed as ‘dark cloud cover’, which suggests the bears are in control.

The benchmark started its day with a minor gap-up opening of around 50 points, which was indicated by the SGX NIFTY. But prices couldn’t hold on to their initial gains and started their lower high lower low journey for the day. Nifty registered its intraday low of 17,892.60 levels and post that recovered smartly in the final hour of the trading session.

Presently the immediate support for the Nifty is placed at 17,900 levels. However, if prices break below this level, then 17,800 – 17,750 will be the fast-forward target for the index. The upper band is capped below 18,200 levels where 21 EMA is placed.

Nifty fell for the second consecutive session on Jan 05, though it recovered smartly from intraday lows post 1330 hrs. At close, Nifty was down 0.28% or 50.8 points at 17992.2. Volumes on the NSE are rising gradually as people return to work after holidays. Broad market improved over the previous session with advance decline ratio rising to 0.92:1. Capital Goods, Tyres, FMCG stocks were in demand.

European stocks edged lower on Thursday, snapping a three-day winning streak as minutes from the Federal Reserve’s meeting sounded a cautious tone on interest rates. Asian shares rose on Thursday on hopes for China's emergence from the pandemic.

Nifty showed an upward correction within the fall that started in the previous session. This rise could take it 18080-18120 band post which the downtrend could resume.

Globally, investors are digesting the FOMC minutes with stock markets trading lower revealing that the Fed officials' are determined to tame inflation by maintaining its aggressive stance. Financials led the losses in the domestic market, following dismal business numbers from NBFC leader. Oil prices recovered after falling sharply on fears of a worldwide recession, as investors remain optimistic about long-term demand.

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