INSUBCONTINENT EXCLUSIVE:
The domestic stock market extend its winning run and hit fresh closing high on Wednesday
NSE Nifty confirmed the breakout as it ended the session with a gain of 56.65 points or 0.47 per cent at 12,221.65.
The headline index’s
support has shifted higher to the 12,100 level
However, the continuation of the upmove after taking out the Double Top resistance has not been explosive and lacks strength
The Nifty OI PCR at present stands at 1.73, which can be seen as overbought.
Also, the market on Thursday will react to GST council meeting,
and given the technical setup, some consolidation at current levels may not be ruled out.
The market will see expiry of the weekly options
in the upcoming session and 12,200 will be a crucial level to watch out for
With the market in uncharted territory, 12,250 and 12,295 levels will act as resistance in Thursday’s session
Support may come in at 12,160 and 12,000.
The Relative Strength Index (RSI) stood at 65.39 on the daily chart and continued to show bearish
divergence as it didn’t mark a fresh 14-period high along with Nifty.
The daily MACD showed a positive crossover and was bullish, trading
No significant formations were seen on the candles.
Pattern analysis showed that Nifty has taken out the Double Top resistance at 12,103 and
shifted its support higher.
However, the market is lacking strength, and this might make the market to consolidate at current levels.
As per
the weekly options data, the 12,200 level will be crucial as this strike price holds the maximum Call open interest and second-highest Put
The behavior Nifty against this level will be crucial on Thursday’s session.
However, taking a slightly extended view, the breakout will
remain in force as long as the index keeps its head above the 12,100 level.
A cautious outlook is advised for the day as we recommend
traders to protect profits at higher levels and keep exposures modest.
(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)
