INSUBCONTINENT EXCLUSIVE:
Along with significant improvement in market breadth, the domestic equity market recovered over 120 points from the low point on Wednesday
and ended the day with decent gains
Wednesday’s session saw rangebound and subdued trade in the first half, but market breadth improved and short covering occurred at lower
levels in the last two-and-a-half hours of trade
The Nifty50 saw over 120-point spurt and ended the day, gaining 82.40 points, or 0.73 per cent
We will enter Friday’s trade after a gap of one day; Thursday being a trading holiday on account of Ganesh Chaturthi
As we approach next session of trade, two factors are working in favour of the domestic markets; one, we do not have any apparent negative
cues to deal with, and secondly, the buoyant Asian markets.
Unless we have fresh overnight negativity to deal with, this may lead to a
positive start to trade on Friday.
While we expect a follow-through at least in initial trade, the 11,410 and 11,465 levels will act as an
immediate resistance level
Supports will come in at 11,250 and 11,210 levels
The Relative Strength Index, or RSI, on the daily chart stood at 45.4649 and it was neutral showing no divergence from price
The daily MACD stays bearish as it trades below the signal line
On the candles, a long lower shadow occurred
This is typically a bullish signal, if it occurs after any downtrend.
Pattern analysis shows after running away much ahead of its curve
following a breakout, the Nifty50 has reverted to its mean
It has currently managed to hang on to its 50-DMA support and the upward rising trend line support that follows soon after that
We are most likely to see a positive opening and some follow-up rally in initial trade
However, the broader range of the market is still likely to remain intact and it would be important to continue protecting profits at higher
Unless a bottom is established in the immediate short term, all upward moves should be utilised to protect profit, while all corrective
downsides should be utilised to make value purchases
With the primary uptrend remaining intact, a cautiously positive approach is advised for the day.
(Milan Vaishnav, CMT, MSTA is Consultant
Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
