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By Kapil Shah(Technical analyst-Emkay global financial services)
Where we are: From the past six weeks, the index is in strong consolidation phase within the range of 11,000 to 10,700 level.
Looking from Technical perspective, Positional moving average like 100- and 200-DMA is flattish which indicates sideways state of market.
28 out of 50 stocks are trading below 200 DMA, however, heavy weight stocks are sustaining above its positional moving average.
Index has formed Ascending Triangle, it shows compression into movement.
In the past one month energy, IT and private banks remained out performer whereas strong selling has been observed in media, auto and metals.
What is in store: Index is in upward rising channel but recently, it is moving in a horizontal patch where it has strong resistance of 11,000 to 11,100 level because it coincides with previous reversal area.
Weekly RSI reading comes at 50 level which another mark of staleness in market.
Current stage of market favours very short term traders.
What could Investors do: As we are heading towards big events like the Budget and elections, volatility may remain at elevated levels.
To create optimism, Index need to surpass its resistance band of 11,000 to 11,100 level, till then index seems to trade with sideways to negative bias.
IT sector can be good avenue to park resources as it is in positive shape and give cushion against downsides.
