INSUBCONTINENT EXCLUSIVE:
Indian equity market followed up positive closing of the expiry day on Friday
The market saw a gap up opening with a renewed vigor, sustained it all throughout the day and the Nifty ended the day with gains of 74.50
We enter into a truncated week with Tuesday being a trading holiday
Barring some more consolidation, we expect this upmove to spill over to coming week as well.
Though we see some possibilities once again of
consolidation happening at higher levels, we expect a quiet to modestly positive start to the trade on Monday
The market is likely to see this expansion happening until its next logical targets of 10,750-10,800 zones
However, this is less likely to happen without any intermittent consolidation spells.
Monday will see the levels of 10,730 and 10,765
working out as immediate resistance for the market
RSI has marked a fresh 14-period high which is bullish
It remains neutral and shows no divergence against the price
The Daily MACD remains bullish trading above its signal line
On the Candles, a rising window occurred
This is essentially a gap and usually sees a continuation of upmove.
Pattern analysis shows that after resisting to an important pattern
resistance area for couple of days, the Nifty has attempted to break out of the rectangle formation
This has happened as a breakaway gap and we are all likely to see continuation of this upmove.
Broadly speaking, given the current set-up,
we might see this breakout resulting into a short phase of fresh upmove, we also cannot discount the possibility of small throw backs
Traders and investors are required to mitigate these risks of throwbacks happening in this otherwise bullish environment
These can be done with choosing stocks very selectively, rotating sectors and remaining vigilant at higher levels
Overall, positive outlook is advised for the day.
STOCKS TO WATCH: Long positions were seen being added in stocks like Federal Bank, Axis
Bank, BEL, Equitas, TV18Broadcast, Dabur, Jindal Steel, DHFL, Kotak Bank, Reliance, Tata Power and Hindustan Zinc.
(Milan Vaishnav, CMT,
MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
