INSUBCONTINENT EXCLUSIVE:
with the falling trend line pattern resistance continued on Monday
With Nifty not able to move past the critical 10820-10850 zones, it is getting vulnerable to pressures, as it moves into the apex of the
the weaker global picture
In any case, the zones of 10,820-10,850 continue to pose critical resistance to the market
Tuesday will see the levels of 10,820 and 10,850 offering resistance, while supports are expected to come in at 10,740 and then at 10,680 in
form of 50-DMA.
The Relative Strength Index (RSI) on the daily chart was 52.8408
It continued to remain neutral showing no divergence against the price
Daily MACD stayed bearish while trading below the signal line
The emergence of a strong black body on candles has once again lent credibility to the pattern resistance.
Pattern analysis shows Nifty
continuing to fiercely resist to the falling trend line, which joined the high of 11,170 to the subsequent lower tops
While it continued to remain in a broad symmetrical triangle pattern, it has moved near its apex and has become prone to a sharp move in
coming days.
Overall, it is time that we once again tread the market with some caution
Though it currently rests very near to its short term 20-DMA, any weakness will make sure that the Nifty tests its 50-DMA.
Also, with each
day with no directional move happening, Nifty is also making itself vulnerable to a sharp move that will lead to resolution to the current
pattern.
We recommend staying away from taking any major directional call and avoid heavy purchases
Shorts too should be avoided until market makes any meaningful directional move
While remaining light on positions, preservation of cash with cautious view is advised for the day.
STOCKS TO WATCH: Relatively resilient
technical set up was observed in PNB Housing, Sun TV, NBCC, Tech Mahindra, First Source, Infosys, UPL, TVS Motors, BEML, Oil India, Havells
and Indigo.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
