'Dragonfly Doji' on charts shows Bulls back in game

Nifty remained in consolidation for the third week and ended with a marginal gain of 39 points on weekly basis to close at 10491, Nifty Bank also gained 0.55% while mid and small cap indices remained almost unchanged.

IT sector topped the chart with 3.5% gain, metals and private banks gained estimated 1% while auto, pharma and realty were among the losers, rest all sectors remained almost unchanged. FIIs sold worth Rs 5,782 crores in equities while DIIs bought worth Rs 5,972 crores in the last week.

Nifty remained weak for first three days and made a low of 10303 and recovered on F&O expiry ahead of short covering and bargain buying across the sectors. PSU banks arrested the fall while IT companies continued to march its rally on weak dollar-rupee, which fell by 1% in last week to close at 64.90.

In the key highlights of the last week, PNB fraud was debated and seized assets and bank accounts of Gitanjali and Nirav Modi’s group. Fortis promoter cut its stake to mere 3% in the company and stocks surged 16%. The US FDA completed Sun Pharma’s Halol plant inspection and issued only three observations which are procedural in nature, stocks made a low of 511 in last week and ended with a loss of 1%.

Key global events like the US December quarter preliminary GDP data and new FED chair Powell testimony will be on Wednesday. India’s Q3 GDP, fiscal deficit numbers and January month infrastructure output data will be released on Wednesday. All automobile companies will announce January monthly sale numbers on Thursday. Indian markets are closed on Friday on account of the colour festival, Holi.

In this short week, post three weeks of consolidation, it could be a make or break situation. The market will try to find the trend ahead of many economic data releases like GDP and fiscal deficit which will weigh on the sentiment. Stock specific action can be seen with Auto, Metal and IT sector stocks in focus.

Technically, Nifty formed a “Dragonfly Doji” pattern which indicates come back to bulls. Nifty supports are at 10400 and 10333 and on the upside resistance at 10550-10620. Thus, for the week Nifty range could oscillate between 10300 to10650.

DATA TO SET TONE

• Q3 GDP, fiscal deficit numbers and January month infrastructure output data will be released on Wednesday.
   
• All automobile companies will announce January monthly sale numbers on Thursday.

The writer is VP- retail research, Motilal Oswal Securities Ltd