StockEdge Morning Market analysis - 29th August
The Nifty gained 34 points over the day to close at 25,052. Although the index hit a new high yesterday, the price action couldn't sustain, resulting in another doji-like structure. The broader market breadth saw more declines than advances. The IT index was once again the top gainer, followed by the Pharma index, while almost all other indices closed in the red.
Technically, it’s just another round of consolidation happening around the 25,100 level, where the supply is gradually being absorbed. Stock-specific actions are seen in strong sectors, but the rest of the market remains subdued. This is a typical sign of consolidation and is absolutely normal. The stochastic indicator is slightly overbought on the daily charts, but there are no signs of divergence. The fact that markets continue to trade above 25,000 shows inherent strength, though a small price/time correction or pullback is possible, which is the nature of a mature bull market. The 24,850 area is now an important support, with a stronger base for changing the trend around the 24,600 zone. A move beyond 25,100 can take the index higher to 25,350 and 25,500.
Bank Nifty made an inside candle yesterday and continues to remain sluggish, while sector outperformance in IT and Pharma is likely to continue.
To conclude, considering that US equities have also recovered and completed a V-shaped recovery, and so has the Indian market, some minor pullback and consolidation around this level is likely.
Nifty
Bank Nifty
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