Nifty Relief Rally

The Nifty gained 1.88 percent today.

Today’s equity indices rose because of a short-covering rally in the battered metal, IT, and auto sectors. Although concerns about rising interest rates, a stronger dollar, higher inflation, and larger deficits remain as is. Finally, a relief rally in the Nifty.

The Nifty 50 gained for the second day in a row after losing 5.16 percent during the previous week. It recorded an intraday high of 15707 and a low of 15420. Further, it closed at 15639, gaining 289 points or 1.88 percent Similarly, the Nifty Bank was up by 507 points or 1.55 percent.

The market rose primarily because of positive global market performance; however, a drop in Brent crude oil prices and heavy selling last week paved the way for short covering. 

The advance-decline ratio was 4.63, and the market breadth was positive. Similarly, the volatility index fell by 5.66 percent to 22.41.

DAILY MARKET ACTION
Advancers – 1792
Decliners – 387
52Wk High – 8
52Wk Low – 118
High Band Hitters – 140
Low Band Hitters – 96
200d SMA – 17224
50d SMA – 16483
20d SMA – 16120

Top Gainers and Losers

The top gainers on the Nifty 50 were Titan (+6.03%), Hindalco (+5.99%), Coal India (+4.69%), JSW Steel (+4.46%), and Tata Motors (+4.02%).

Meanwhile, the top losers in the Nifty 50 were Nestle (-0.10%) and Apollo Hospital (-0.02%).

Sectors & Broader Indices

Media, Oil & Gas, PSU Banks, Metals, IT, Consumer Durables, and Realty all saw broad-based buying, with each gaining 2-5 percent.

Likewise, the broader indices followed the benchmarks. The Nifty Midcap 50 gained 2.83 percent, while the Nifty Small cap 50 gained 3.39 percent.

SECTORS – NOTABLE ACTION
MEDIA +5.49%
OIL & GAS +4.83%
METAL +3.97%

Looking Ahead

Because of heavy selling last week, the market appears to have ignored the concerns and rallied in anticipation of better corporate results in the first quarter of 2022. However, currently, the Nifty is trading below its 20-day, 50-day, and 200-day simple moving averages.

Daily Pivots

The Nifty trading range for tomorrow is 15450 to 15750, with a negative bias.

As noted in the weekly blog, because of heavy selling during the week, the RSI and MACD indicators are reading low, showing the possibility of a relief rally.

Previously, the Nifty broke through the 15800 – 16800 level box on the downside, and 15800 is now a significant resistance to overcome before any meaningful run.

Given the current macroeconomic and geopolitical concerns, however, even minor developments can cause significant volatility.

Furthermore, because there is no major economic news or data this week, indices may remain volatile for the rest of the week or move up or down in response to analyst reports!

Read previous -Daily Insights- here
Nifty up slightly, but gains are still a long way off
A sharp drop followed a brief uptick
Waiting for the US Fed meeting outcome

This article is only for educational purposes and is not an investment advice.