INSUBCONTINENT EXCLUSIVE:
The domestic equity market again failed its attempt to break above the double top resistance at 12,103
On Friday, it adopted a corrective move and ended the day with a loss
Nifty opened on a positive note after spending the initial hours in the positive before the market gradually slipped into the red
Nifty then stayed in the falling trajectory throughout the day.
The session witnessed secular selling pressure and showed no intent to
recover at any point in time
The headline index finally ended the day with a net loss of 96.90 points, or 0.81 per cent.
With Friday’s decline, the market has again
reaffirmed the double top resistance at 12,103
Nifty has not been able to take out this resistance despite making incremental highs
For the immediate short-term, the 12,103-12,160 zone remains a significant resistance, which Nifty will have to take out convincingly for
any significant up-move to occur.
Until this happens, the market will continue to consolidate, and it is likely to face selling pressure at
higher levels.
On Monday, the market may have a positive start if at all it tracks the positive global setup
However, the 11,980 and 12,065 levels will act as resistance, while supports will come in at 11,875 and 11,815 levels.
The Relative Strength
Index (RSI) on the daily chart stands at 50.48; it has marked a fresh 14-period low, which is a bearish signal
The daily MACD is bearish and trades below its signal line
The PPO stays negative.
Pattern analysis showed Nifty has again failed in its attempt to break above the double top resistance
With Nifty is not breaking above the double top resistance, the 12,103-12,160 zone now remains a major overhead resistance.
Apart from
failing to clear the double top resistance, Nifty has slipped below its short-term 20-day moving average, which currently stands at 11,979
This level will also act as a resistance if the market attempts a pullback
With the market slipping below the 20-DMA, it has increased the possibility of Nifty testing the lower band around 11,800.
However, as long
as Nifty stays above 11,800, it will remain within a broad consolidation range
While avoiding excessive leverage, a cautious view on the market is advised for the day.
Milan Vaishnav, CMT, MSTA, is a Consulting
Technical Analyst and founder of Gemstone Equity Research - Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia
