Going forward market movement will depend on FII and DII trading activity: CapitalVia Global Research

Nifty opened in today’s trading session with flat note following mixed cues from Asian market despite a record high posted by US market overnight. Throughout the trading session market remained soft and volatility increased after the inflation data based on wholesale price index showed an acceleration to 3.55% in July 2016 from 1.62% in June 2016. Market closed at 8657.10 down by 21.30 points before it recovered from its day's low around 8600. Nifty in its daily chart has formed a hammer type candlestick pattern. This type of pattern implies that the market find support at lower level and bulls are using market correction to enter from long side. However, the low at 8600 level is the key for the pattern. Going forward a move below this level we may see profit booking to trigger.

Overall we expect a short term correction if market move below 8600 level. However as the medium term trend is extremely bullish any medium term pull back or correction is expected to reverse quickly and should found support at 8400-8450 level. On the upside resistance is visible around 8720-8750. Going forward market movement will depend on FII and DII trading activity, movement of crude oil in international market and global market trend.

By Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd.