Stock Market

Trade setup: Nifty evenly poised, must reclaim 10,400-10,420 zone

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Indian stock market in a muted session on Thursday remained in a defined range and ended flat.

The NSE benchmark Nifty settled with a negligible loss of 6.15 points or 0.06 per cent. Despite witnessing a capped and rangebound moves, the session remained technically important.

On the expected lines, Nifty resisted the 10,400-10,420 zone and never made any convincing move above these levels.

However, it did not saw any selloff from those levels and chose to fiercely consolidate near them. On Friday, for the Nifty to confirm the creation of a temporary base, it is important to move past and stay above the 10,400-10,420 zone.

While a quiet start to the trade is expected on Friday, the behaviour of the index vis-à-vis these levels will be important to watch for. The levels of 10,450 and 10,535 will offer immediate resistance to Nifty on Friday.

Supports may come in at 10,330 and 10,250 zones. The RSI on the daily chart stood at 45.3294 and remained neutral showing no divergence against the price.

The daily MACD stayed bullish while trading above its signal line.

No significant formation was observed on the candles. If we consider two previous sessions, Nifty has recovered over 290 points from the lows.

After posting a gain of 188 points, it chose to consolidate in Thursday’s trade. We expect the index to now consolidate a bit with a positive bias and attempt to move past the important 10,400-10,420 zone. If this happens, Nifty might test the 10,600-10,630 levels over the coming days.

However, for the present pullback to continue, moving past the 10,400-10,420 zone is critical.

Failure to do this will put the index under more consolidation, as Nifty will continue to remain vulnerable to volatile profit taking at higher levels. (Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara.

He can be reached at This email address is being protected from spambots.

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