INSUBCONTINENT EXCLUSIVE:
A day after paring 120 points from the high point of the day, the Nifty continued to remain weak on Wednesday, as it opened with a modest
gapdown and drifted lower during the session.
The market made an attempt to recover from the day’s lows, but ended the trade losing 60.75
points or 0.56 per cent.
While keeping aside the prevailing uncertainties over Karnataka politics – even though it had short-lived
sentimental effect -- the present technicals continue to point towards more consolidation.
We are likely to see a quiet opening on Thursday,
and the previous day’s low and its range would be an important support to watch out for
The zones of 10,680-10,700 would be immediate levels wherein the Nifty might consolidate again
Thursday will see the levels of 10,745 and 10,785 acting as immediate resistance
Supports will come in at 10,680 and 10,625.
The Relative Strength Index (RSI) on the daily chart is 60.1660, and it continues to remain
neutral showing no divergence against the price
The daily MACD stays bullish, while trading above its signal line
On the candles, a ‘Spinning Top’ was formed
It has a small real body and signifies a session full of indecisiveness on part of market participants
Pattern analysis reveals that the Nifty has stalled its upmove, which it had resumed after suffering a throwback
The index has broken out of a broad rectangle formation as evident from the charts
However, even after a throwback and subsequent resumption of the upmove, the Nifty still appears to remain under consolidation.
Overall,
though we can expect some stability to come in, volatility is still likely to remain very much ingrained in the session
Though any structural breakdown may not happen, still oscillations within a given range are likely to remain volatile.
Also, the higher
levels of Nifty PCR (Put to Call Ratio) still remain a concern.
We expect consolidation to continue, as the Nifty is likely to oscillate
keeping the range of 10,785-10,930 as its major resistance area for the immediate short term.
Highly cautious and stock specific approach is
STOCKS TO WATCH: Selective longs were added in stocks such as ITC, PTC, Jain Irrigation, IRB, HCC, Escorts, Dish TV, Tech Mahindra, Dabur,
Capital First, Nalco, Motherson Sumi, YES Bank and Asian Paints.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone
Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
