INSUBCONTINENT EXCLUSIVE:
Opening after a trading holiday, the stock market on Thursday saw a positive start on expected lines
Though it marked a fresh marginal high once again, it saw paring of gains after the initial trade
However, Nifty once again recovered gradually from the low point and spent rest of the session in a capped range
It ended with a gain of 11.85 points or 0.10 per cent
Thursday’s session was a classical consolidation that happens when the market is in overbought zone, but refuses to correct
In this process, we also saw some mild signs of exhaustion though it may be very temporary in nature
It came in the form of slightly cracked market breadth, as the few of the broader sectors underperformed.
As we approach Friday’s session,
we expect a quiet start to the trade
However, the high level of 10,620 may continue to pose resistance to Nifty in the immediate short term
The index is at risk of slipping into a range corrective movement, which can be called consolidation in a broader sense.
The levels of
11,620 and 11,655 will pose technical resistance to the Nifty on Friday
Supports have moved little lower against the current closing levels, and they exist at 11,535 and 11,480 levels.
The RSI (Relative Strength
Index) on the daily chart is 71.0629
While continuing to remain mildly overbought, it also continued to show bearish divergence against the price
The daily MACD stays bearish while trading above its signal line
No significant formations was observed on the candles.
Coming back to the RSI, it was seen resisting to a pattern and this may potentially
stall the upmove in the immediate short term.
Overall, the Nifty is displaying signs of mild tiredness on the charts
The intraday bands are getting narrower and the market breadth is slightly cracking.
As mentioned in the previous notes, investors may
continue to chase momentum, but they will have to remain extremely vigilant at higher levels.
While keeping the overall positions very
light, high degree of caution is advised for the day, as very temporary stalling of upmove may not be ruled out.
STOCKS TO WATCH: Good
technical set up was observed in stocks of Piramal Enterprises, Ashok Leyland, NCC, Aurobindo Pharma, Jain Irrigation, Bata India, HCL
Technologies, Bajaj Finance, United Breweries, Mindtree, Thomas Cook and HDFC Standard Life.
(Milan Vaishnav, CMT, MSTA is Consultant
Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
