By Sandeep Porwal
Technical Analyst Institutional Desk, Ashika Stock Broking
Where we are: The
Nifty snapped its winning streak and traded lower on Friday,
Union Budget remained a key trigger for the intraday whipsaws. Market breadth indicates a change in the stance of the market participants since advance-decline ratio skewed toward the decline. On the sectoral front barring
Nifty Bank, FMCG, financial services and PSU bank, all the other sectors were key underperformers as they staged a correction up to 4 per cent in Friday’s session. Mid- and Small Cap indices also failed to sustain at the intermediate highs and traded lower.
What is in store: Since the breakout near the
election outcome day index continues to trade within the range of 11,590-12,040 band, Nifty is trading direction neutral with mixed bias. On the daily
chart, formation of bearish engulfing candlestick near the upper end of the range indicates the above-mentioned range still remains valid. We expect follow-up correction while a major trend reversal to take place only in the event of a close below the level of 11590, it remains a make-or-break level in the near term.
What could traders do:
Sideways trending market is always tricky to play, as a failed breakout of the range keep resulting in the unusual rise in the volatility. On the option front, Call writing is seen at 12,000 strike for both weekly and monthly expiries — thus a level of 12,000 remains a key hurdle. We expect auto stocks to continue to remain underperformers. On the stock front, we recommend long in Britannia and Colgate Palmolive while we expect a follow-up correction in Maruti, Wipro and Infosys.