Some consolidation was seen in the index, but the overall trend remains positive
Last Updated: 10th July 2023 - 05:01 pm
During last week, Nifty rallied higher for the most part of the week and marked another milestone above 19500. The index consolidated in a range in Monday’s session, but the rally in the index heavyweight Reliance Industries kept the Nifty in green and it ended around 19350 with marginal gains.
It was a day of consolidation as far as index move was concerned. The key indices consolidated within a narrow range while some profit booking was seen in the broader market due to which the breadth was marginally in favor of the declines. Due to sharp rally in last few weeks, the momentum readings have reached the overbought zone and needs to cool-off which can either be seen through some time-wise or price-wise corrective phase. Hence, although the trend still remains positive, some consolidation or a correction could be seen in the indices this week. However, the data remains positive as FIIs are holding around 70 percent of their positions in the index futures segment on the long side and they have been buying gradually in the cash segment too. Although, the Client segment has been bearish in index futures with 57 percent of positions on the short side. In the options segment, 19400 and 19500 call options have high open interest which would be seen as the immediate resistance zone of this weekly expiry. The immediate support for watch out in Nifty is around 19300 followed by 19200-19100 range. Till the important supports in Nifty are intact, we believe the index would just see some consolidation and then resume the uptrend as the trend remains strong. Hence, we do not expect much downside in the Nifty while some stock specific correction could be there.
Traders are advised to continue to trade with a ‘Buy on dip’ strategy and use any declines as buying opportunities.
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