INSUBCONTINENT EXCLUSIVE:
of the breach of 100-DMA level, which was most damaging
After spending nearly first half of the session just below the 100-DMA of 10,538, the index slipped and went on to breach even the 50-DMA
Though we expect a quiet start to the trade again, we might see some weakness persisting for some more time
The zones of 10,380, which is a major 27-month long trend line support and the 10,330 mark, which is the 200-DMA, now remains the sacrosanct
support for the markets.
Given the weakness on some of the indicators, there are chances that the market may test these support areas before
it gets oversold.
The Relative Strength Index (RSI) on the Daily Chart is 37.19, and it has marked yet another 14-period low, which is
The daily MACD remains bearish while trading below its signal line
A big black candle emerged
The emergence of this candle near the important resistance area of 100-DMA signifies the credibility of the resistance area.
The resistance
for any kind of upmove remains at 10,470 and 10,538 levels with supports coming in at 10,380 and 10,330 levels.
Pattern analysis confirmed
the breach of the 100-DMA levels on the daily charts
With the 50-DMA trading below the 100-DMA mark, and with the Nifty ruling below both of these levels, the area of 100-DMA remains a
important resistance area that the Nifty will have to move past over coming days.
Overall, apart from PSU Banks and some resilience from the
IT Index, the weakness had remained across the board
Upmoves in Nifty are likely to remain capped first 10,470 and then at 10,538 zones
Until these levels are breached on the upside, we will continue to see the market vulnerable at higher levels with every pullback.
The Nifty
remains in no-trade zone and the sessions ahead, just like the one on Wednesday, are likely to remain very much dominated with stock
specific activities.
We recommend refraining from creating any major positions and preserve liquidity to make quality purchases at each
Continuance of cautious outlook is advised for the day.
STOCKS TO WATCH: Fresh unwinding of long positions was seen in stocks like JP
Associates, Axis Bank, RCOM, Infosys, IDFC, PNB, Tata Power, Reliance, Petront, Granules, Federal Bank, DLF, Kotak Mahindra Bank and
Havells.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
