SGX Nifty was trading more than 90 points higher on Monday morning, hinting at a positive start for domestic equities.
Domestic equity benchmarks S&P BSE Sensex and NSE Nifty 50 enter this week’s first trading session sitting near all-time highs as bulls regained control on Dalal Street last week. S&P BSE Sensex is currently at 60,048 while the NSE Nifty 50 is sitting at 17,853, both having gained nearly 2% last week. The positive momentum may continue with SGX Nifty surging over 90 points higher, hinting at a positive start for domestic equities. Global cues were positive at the start of the week. “Nifty on the weekly chart formed a long bull candle, which has overlapped previous bull candle. This signal that the uptrend as per medium term is intact and any minor weakness of short term is unlikely to have any sharp negative impact on uptrend of the market,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Global cues: On Wall Street, Dow Jones and S&P 500 closed with gains during the previous session, but NASDAQ ended with losses. However, Asian stock markets were in firm control of bulls during the early hours of trade. Shanghai Composite, Hang Seng, Nikkei 225, TOPIX, KOSPI, KOSDAQ along with Australian equity indices were trading in the green.
Technical take: Although the weekly chart pattern for Nifty 50 shows a bullish bias, on Friday the daily chart formation was a small negative candle with minor upper and lower shadow, according to Nagaraj Shetti. “Technically, this action signal a formation of spinning top type candle pattern at the highs. Normally such formations after a reasonable upmove or at the hurdle more often act as a downward reversal pattern,” he added. Nagaraj Shetti has not ruled out minor weakness in the early part of the week.
Levels to watch out: Nifty has not moved past 17,800 level which was a crucial resistance. “For the index, 17775-17700 could be the important support levels. On the flip side, 18000 and 18200 could act as a major resistance level. Contra traders can take a long bet near 17700 with a strict 16650 support stop loss, while partial profit booking is advisable between 18100 to 18200 level,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
FII and DII trades: Foreign Institutional Investors (FII) were net buyers of domestic stocks on Friday for the second consecutive day. FIIs pumped in Rs 442 crore into equities. Domestic Institutional Investors (DII) were net sellers, pulling out Rs 515 crore.
IPO watch: IPO markets will continue to see action this week with the public issue of Aditya Birla Sun Life AMC set to open on Wednesday. Aditya Birla Sun Life AMC is looking to raise Rs 2,768 crore by sell equity shares in a price band of Rs 695-712 per share. Further, the high-flying Paras Defence and Space Technologies could list on the bourses later this week. The IPO of Paras Defence and Space Technologies was subscribed 304 times.