INSUBCONTINENT EXCLUSIVE:
The battle for Karnataka infused immense volatility in the market on Tuesday, as the NSE benchmark Nifty50 moved over 120 points on either
side before ending flat, losing just 4.75 points or 0.04 per cent.
The possibility of an absolutely majority for the BJP fuelled a rally in
the market with Nifty trading over 115 points higher in early trade
However, the second half, wherein the possibility of a hung assembly became evident, the Nifty pared all of its gains to end flat.
With the
quiet start to the session
Volatility has remained ingrained in the market
Any slip below 10,785 will push the market for some prolonged consolidation in the near term
The levels of 10,835 and 10,890 will act as resistance areas for the market
Supports will come in at 10,780 and 10,710 zones.
The Relative Strength Index (RSI) on the daily chart stood at 66.9352
It remained neutral and did not show any divergence against the price
The daily MACD remained bullish while it traded above its signal line
On the candles, a long lower shadow occurred
With this formation occurring after an upmove, it can potentially stall the rally and can push the market into consolidation.
The pattern
analysis saw the market failing to break below the 10,785 mark
At one point with the market trading well this level, it had given a breakout, but this was not sustained as the Nifty pared its gains in
the second half of the trade.
Overall, though Nifty attempted a breakout above the 10,785-mark, it is likely that will take some more time
The Nifty has most likely pushed itself again for some more consolidation.
If there is any significant slip below the 10,785 mark, more
weakness is likely to creep in.
This being said, with the structure on the charts remaining intact, pain, if any, will remain more visible
in the broader market than in the frontline Indices.
We recommend remaining light on positions and maintain a cautious view on the market
We also recommend utilising such dips to make select purchases in the quality stocks.
STOCKS TO WATCH: Short positions added in stocks such
as National Aluminum, CG Power, NCC, Tata Motors, Ashok Leyland, BEL, ITC, PFC, Tata Motors, Indiabulls Housing Finance, Vedanta, NBCC and
Axis Bank.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
