INSUBCONTINENT EXCLUSIVE:
Though the market was expected to find some stability, the Nifty traded contrary to expectations on Thursday
After making a tepid start and losing ground in the initial trade, the index rebounded sharply and nearly tested the 100-DMA
The index ended with a gain of 83.50 points or 0.80 per cent.
On technical parameters, the Nifty has defended the 50-DMA levels on closing
basis, which stood at 10,471.60.
For Friday, we expect this attempt of a pullback to continue
Friday is likely to see the levels of 10,538 and 10,595 acting as immediate resistance area
Supports came in lower at 10,470 and 10,380 zones.
The Relative Strength Index (RSI) on the daily chart is 44.16 and it remains neutral
showing no divergence against the price
The daily MACD stays bearish while trading below its signal line
It has started to narrow its trajectory
On the candles, a strong bullish candle emerged
It has emerged near the support area of 50-DMA, and therefore it holds some significance.
The pattern analysis throws up an interesting
The 50-DMA rules below 100-DMA level and this indicates likely continuation of short-term weakness
The Nifty has pulled back from near the 50-DMA and this has validated 50-DMA as support for the immediate short term
However, it has still resisted to the 100-DMA mark, which stands at 10,538.
Overall, the level of 10,538, which is the 100-DMA, has come
into play again.
Though a quiet start is expected and some followup move may still be seen, the Nifty can still find resistance at 100-DMA
Any fresh sustainable upmove shall occur only after the Nifty moves past and closes above this level
Until this happen, theoretically speaking, the market remains susceptible to selling pressure at higher levels.
STOCKS TO WATCH: Long
positions were seen in stocks such as Bharti Airtel, State Bank Of India, JSW Steel, PFC, NCC, Idea, Sun Pharma, DLF, Power Grid, KPIT,
Infosys, ICICI Bank and ITC.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services,
He can be reached at milan.vaishnav@equityresearch.asia)
