INSUBCONTINENT EXCLUSIVE:
Authors: JordanThe session on Friday saw the corrective action getting extended, as the market continued with its modest slide
The benchmark index Nifty50 continued to fall and ended the day with a loss of 61.40 points or 0.57 per cent.
The session remained
relatively less volatile and therefore did not see VIX rising too much
The session remained confined to a narrow range all throughout the day.
As we approach a fresh week, stable global environment may see
Indian market opening on a modestly positive mode
We may also see some technical pullback
But speaking on broad terms, we will continue to see consolidation persisting in the market with the previous week’s high acting as a
major resistance.
Monday’s trade is likely to see the levels of 10,650 and 10,695 acting as resistance
Supports are likely to come in at 10,575 and 10,540.
The Relative Strength Index (RSI) on the daily chart is 57.8654, and it has marked a
fresh 14-period low, which is bearish
RSI has marked a fresh 14-period low while Nifty has not done so
This also marks a bearish divergence against the price.
Daily MACD still continues to trade above its signal line
No significant formations were seen on the candles.
Pattern analysis shows that after breaking out from the rectangle formation and testing
immediate highs of 10,785, the Nifty has been giving a throwback
It continues to remain in this formation until it forms a higher bottom and attempts to move higher again.
Overall, though a positive and
stable start is expected on Monday, we will continue to see consolidation persisting at higher levels
The markets still continue to remain vulnerable to profit taking bouts at higher levels unless the levels of 10,785 are breached on the
upside.
The VIX continues to remain low, and this keeps room for volatility to increase in the near-term
Though there are no signs as yet that point towards any major downsides.
While continuing to avoid shorts, any corrective moves from higher
levels should be used to make fresh purchases
Highly stock-specific approach with cautious view on the market is advised for the day.
STOCKS TO WATCH: Relatively better technical setup
was observed in stocks such as Tata Sponge, Future Lifestyle, GAIL, Bosch, TV18 Broadcast, Indigo, LT Foods, SRS, JMT Auto and IVRCL.
(Milan
Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
