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The equity market on Tuesday saw a better-than-expected pullback despite the initial weakness and ended with decent gains.
The market after a negative opening, spent the morning session in a range, with modest losses.
However, from afternoon onwards, Nifty gathered strength and settled 100.30 points or 0.96 per cent higher.
The pullback was on account of short covering from the lower levels.
Also, Nifty stalled its rally near the important 10,600 mark, which also is its falling trendline resistance area.
As we approach the Wednesday’s session, it will once again be important for the index to attempt and navigate the 10,600-10,650 zone, which is very much likely to pose resistance going ahead.
The upcoming session is likely to see stiff resistance coming in at 10,650 and 10,690 levels for Nifty.
Supports may come in at 10,550 and 10,510 zone.
The Relative Strength Index (RSI) on the daily chart stood at 52.2530 and it stayed neutral against the price showing no divergence.
The daily MACD stayed bullish while trading above its signal line.
No significant formations were seen on the candles.
Overall, despite the strong pullback, the market remains in a broad falling channel, which Nifty has created for itself over past couple of weeks.
For Nifty to move out of this falling channel, it will be important for the index to move past the 10,600-10,650 zone and sustain above that.
On broader terms, market is still are not completely out of the woods and there are chances that we continue to witness more consolidation at higher levels.
Nifty stares at multiple overhead resistance going ahead and some volatility at higher levels cannot be ruled out.
We recommend maintaining a cautious view on the Markets for the day.
(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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Trade setup: The 10,650 10,600 levels still pose threat to Nifty50
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