INSUBCONTINENT EXCLUSIVE:
Friday’s session continued to see the market consolidating once again
After opening on a modestly positive note, the NSE benchmark Nifty pared its opening gains and drifted into the red
Though it remained in a capped range, it ended with a small loss of 25.65 points or 0.22 per cent.
On Monday, expect the market to make a
flat to modestly positive start
Also, at the same time, we also see the market continuing to consolidate
The upsides are likely to remain capped with limited upsides
The Nifty is likely to continue to trade in a broad range with each upside likely to meet with corrective bouts.
The levels of 11,620 and
11,650 is likely to act as immediate technical resistance area
Supports may come in lower at 11,510 and 11,465 zones.
The Relative Strength Index (RSI) on the daily chart is 68.4064
It remains neutral showing no divergence against the price
RSI has moved below from a topping formation and it is bearish
It also continues to resist within a pattern
The daily MACD stays bearish while it trades below its signal line
No significant formations were seen on the candles
By looking at pattern analysis, it becomes fairly evident that though Nifty has continued with its upmove while marking marginal highs, it
is now visibly over extended on the daily charts as well as higher time frame charts.
In all likelihood, the previous immediate high of
11,620 may act as a minor temporary top for the market.
We expect this level to offer resistance in the immediate short term and each higher
move will continue to keep Nifty vulnerable to profit taking bouts from higher levels.
We recommend focussing on protecting profits at
Fresh positions should be initiated on highly selective basis.
We strongly recommend refraining from making bling purchases while attempting
Though the uptrend remains largely intact but short-term corrective moves resulting in to broad rangebound consolidation cannot be ruled out
Cautious view is advised for the day.
STOCKS TO WATCH: Short positions were seen being added in stocks like Adani Power, South Indian Bank,
Idea, ICICI Bank, Bharti Airtel, TATA Motors, Ashok Leyland, Sun Pharma, CG Power and TV18 Broadcast.
(Milan Vaishnav, CMT, MSTA is
Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
