INSUBCONTINENT EXCLUSIVE:
After making a buoyant start to the trade on Monday, the NSE benchmark Nifty pared gains and traded rest of the session in a rangebound
The index ended with a modest gain of 26.30 points or 0.23 per cent
The paring of gains from higher levels was a sign of a very short-term fatigue.
Investors can expect a quiet start to the trade on Tuesday
We might continue to see modest upmoves, but despite the buoyant setup, the Nifty is overbought and needs to consolidate as It continues to
remain vulnerable to profit taking at higher levels.
Tuesday will see the levels of 11,430 and 11,455 posing as fresh resistance to the
Supports may come in at 11,320 and 11,270 levels.
The Relative Strength Index (RSI) on the daily chart is 71.1663
The RSI continues to show bearish divergence on the charts
While Nifty continued to trade at 14-period high, the RSI has not done so.
The daily MACD stays bullish while trading above its signal line,
but it has started to flatten its trajectory
Though a rising window has occurred on the candles, it may not translate into much strength in the present context and structure of the
charts.
Pattern analysis shows that the Nifty has now successfully achieved a breakout from the 11,170-11,175 levels, which represented a
previous high and a double top formation.
Presently, Nifty is seen likely to exhaust its upmove and consolidate at higher levels.
Overall,
the Nifty is evidently overstretched on the charts and for it to see further sustainable upmoves, some amount of consolidation looks
overdue.
The index has started to show some signs of tiredness and fatigue
At the present juncture, we recommend avoiding any kind of major purchases at current levels.
We are likely to see some sector rotation
during the expected rangebound consolidation, which will lend more strength to the market in coming days.
While very vigilantly protecting
profits at higher levels, a cautious view is advised for the day.
STOCKS TO WATCH: Long positions were seen being added in stocks like ICICI
Bank, PNB, State Bank of India, Hindalco, Axis Bank, PTC, IDBI, NBCC, PFC, NMDC, DLF, NCC, Hindustan Zinc, Coal India and TVS Motors.
(Milan
Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
