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Nifty Auto, Realty Surge on Short Covering
29 Jun
Summary
- Nifty 500 stocks above 10-day SMA dropped below 50%.
- Nifty Auto eyes breakout, showing bullish reversal signs.
- Nifty Realty broke resistance, supported by strong short covering.
The broader market experienced a downturn, with less than half of Nifty 500 stocks trading above their 10-day moving average as of Friday. This follows a week where the Nifty 50 index formed an inverted hammer pattern, indicating potential trend reversal, though it maintained a close above 24,050.
The Nifty Auto index is showing promising signs of a bullish reversal. Increased trading volumes and an attempt to break through horizontal resistance suggest renewed market interest. Derivatives data reveal significant short covering across nearly 90% of auto sector stock futures, indicating reduced downside pressure and enhanced upward momentum.
Concurrently, the Nifty Realty index has achieved a strong bullish setup after breaking a critical resistance level. This breakout is supported by bullish reversal candlestick patterns on monthly charts and sustained trading above key moving averages. Derivative markets show robust conviction, with approximately 100% of realty stock futures experiencing short covering on Thursday.
Key constituents in both sectors, including Mahindra & Mahindra, TVS Motor, Maruti Suzuki, Hero MotoCorp for Auto, and Godrej Properties, Oberoi Realty, Phoenix Mills, Prestige Estates Projects for Realty, are demonstrating broad-based strength. These positive trends suggest potential for further upside movement in the coming sessions.
