INSUBCONTINENT EXCLUSIVE:
end the day with modest gains
On the lower side, the Nifty held on to its 200-DMA and on the higher side, it continued to resist to the falling trend line pattern
After a capped move, the benchmark Index ended the day with minor gains of 13.90 points (0.13 per cent).
After a pullback of over 500 points
from the low of Tuesday, the Nifty has not shown any corrective decline
Instead, it has consolidated in a narrow range
This can be interpreted as internal strength in the markets, but at the same time, unless it clears overhead resistance area, one must
maintain a cautious view.
We expect a soft start to the trade on Monday
The overhead pattern resistance will continue to pose some threat and the behaviour of the Nifty against its 200-DMA, which is currently at
10,759, will be important to watch for.
Monday is likely to see the level of 10,820 and 10,895 to act as immediate resistance for the
Supports come in at 10,750 and 10,710 zones.
The Relative Strength Index (RSI) on the Daily Chart is 55.9298; it stays neutral and shows no
divergence against the price
Daily MACD has shown a positive crossover and it is now bullish while trading above its signal line.
The pattern analysis of the Nifty
reveals that the index is resisting the falling trend line resistance
This trend line is drawn from the high of 11,760 and it is joining the subsequent lower tops
On the lower side, the Nifty has so far managed to keep its head above the 200-DMA at 10,756.
Overall, despite evident buoyant undercurrent,
there are high chances that the Nifty remains in a range bound trade for some time before it takes a directional call
However, until the overhead pattern resistance is taken out, we continue recommending protecting profits at higher levels and the markets
may remain prone to profit taking bouts from higher levels
Dips may be used to make select purchases.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory
He can be reached at milan.vaishnav@equityresearch.asia)
