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Market Report

Tuesday, 24-May-2016

NSE

  • The Sensex was down 159 points at one point before bouncing back to close at 25,305.47 today, up +0.30 per cent or 75.11 points while the broader Nifty50 settled at 7,748.85 today, up 17.80 points or +0.23 per cent. In a reversal of the last few days, the market made a smart uptrend at the last hour before closing, though investors remained cautious ahead of the expiry of May series F&O contracts. Earlier, a fall in the rupee and fresh weakness in crude prices made the equity benchmarks swing between gains and losses through the day.

  • After registering losses for four straight sessions, markets closed positive in today's trade as investors accumulated quality stocks at valuable and attractive levels. Strength in European equities further uplifted the mood at D-Street. However, fears of an interest rate hike by the US Federal Reserve in June along with decline in crude oil prices and weakness in rupee capped the upside gains.

  • The Nifty50 managed to bounce back from its crucial support level at 50-day EMA for the fifth consecutive time since March, which shows early signs of a reversal. In the process, the index formed a Hammer-like pattern on the daily candlestick charts today. It continued to make lower lows but respected its 50-day simple and exponential moving averages on a closing basis, which is a positive sign for the bulls. Even though the Nifty showed early signs of strength, it has to close above the 7,792 level, which is also its 200-day moving average, in order for the strength to sustain. Until then, the rangebound movement is likely to continue.

  • For a clear-cut breakdown, the bears will have to take Nifty below 7,700, and we may see a correction of 3-4 odd per cent. But if Nifty sustains above 7,700, it will give the bulls an opportunity with low-risk entry for the upper band of the zone to 7,900. If we take a cue from previous week's closing, the bears are likely to have a grip on the market over the near term, said Mustafa Nadeem of Epic Research.

NIFTY 3-Month

(Data/Charts courtesy NSEI/Yahoo!/iCharts/The Economic Times)