“Today, the benchmark indices opened gap down as the US markets corrected after the new Fed Chief hinted towards the probable three hikes in interest rates going forward. This certainly had a rub-off effect on Asian markets and we were no exception to this. The Nifty index registered low of 10461.55 in few minutes post opening and then consolidated for the entire trading session to end the day tad below the 10500 mark.
Yesterday’s corrective move from the resistance of 10640 got extended in today’s session as the Nifty went on to sneak below the 10500 mark on a closing basis. If we observe the recent past, it is seen that the Nifty has consolidated in a broad range of 10300-10640, which can be termed as a time-wise correction. Thus, last two day’s correction is a part of this consolidation phase and in such scenario, one should ideally avoid trading aggressively. Although Nifty has closed below the 10500 mark, it has formed a ‘Doji’ candlestick pattern on the daily chart. Considering this, the short term range for the Nifty is at 10450-10640. Short term traders are advised to trade with a stock specific approach and follow proper risk management.
In our previous article, we had highlighted about the ‘Nifty PSU Bank’ index approaching the support of 2928. The individual stocks within this sector witnessed a good pullback move as we saw PSU Bank index rebounding from a kissing distance of this important junction. Thus, a retracement of the recent fall could be seen in stocks within this sector in next couple of days.”
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