INSUBCONTINENT EXCLUSIVE:
Weakness continued to persist in the domestic market on Monday as the benchmark Nifty50 index continued to decline for the second day and
end with losses.
By now, the market has retreated nearly 50 per cent of its over 650-point pullback that it had seen during the week
Late afternoon trade saw Nifty lose ground rapidly
The index ended the day, losing 90 points or 0.84 per cent.
Global weakness has refused to go away
The rout continued in the US market and the Dow Jones has lost over 2,200 points in last six sessions
resilient and should continue to relatively outperform its global peers.
Wednesday also happens to be the penultimate day of December FO
Rollovers are likely to dominate the session with the 10,700 and 10,765 levels acting as key resistance for Nifty while 10,610 and 10,560
levels should act as key supports.
The Relative Strength Index, or RSI, on the daily chart stood at 46.6611 and it remains neutral against
the price as it is not showing any divergence
The daily MACD remains bearish, as it trades below its signal line
Apart from the black body that has occurred, Nifty does not show any significant formations on the candles.
Pattern analysis shows Nifty has
retraced from a minor double top formation, which also coincided with the 100-DMA level, which currently stands at 10,927
These two DMAs are set to offer stiff resistance to the market going forward.
Overall, we do not expect any strong move on either side
There is a strong likelihood that Nifty will see a weak opening but will eventually improve as the day progresses
In any case, we are unlikely to witness any runaway rise, at least until expiry of the current FO series
We recommend remaining very light on overall exposures
Avoid aggressive bets on either direction
One can make selective purchases in modest quantities as long as NIFTY does not show any structural breakdown
All in all, a cautious approach is advised for the day.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity
Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
