INSUBCONTINENT EXCLUSIVE:
Rollovers and expiry of December derivative series saw the market trading on a tricky turf, oscillating within a limited range on Thursday,
before ending the day with modest gains
Despite a strong opening, Nifty came off its highs
upward move halted exactly at the 200-DMA level at 10,772
The index ended the day with a gain of 49.95 points or 0.47 per cent
The 200-DMA level continues to be crucial for Nifty
An analysis of the intraday move shows Nifty came off its highs, but extended its upward move on a closing basis, while halting at the
We expect a soft opening on Friday with chances that the market might extend its upward move
However, it will important for Nifty to trade above the 200-DMA level, and any breach below that will trigger volatile rangebound moves.
The
10,810 and 10,875 are likely to pose resistance to Nifty on the upside, while supports will come in at 10,710 and 10,680.
The Relative
Strength Index or RSI on the daily chart stood at 51.9379 and it remained neutral showing no divergence against price
The daily MACD has turned bearish and trades below the signal line
A rising window occurred on the candles
Usually, it implies continuation of the upward move, but under the present circumstance, a confirmation is required on the next trading
day.
Pattern analysis of the charts revealed the minor gap-up opening that the market saw on Thursday took the index above the pattern
resistance of the falling trend line.
However, the upward move got halted at the 200-DMA mark at 10,772
Overall, in last two sessions that are left of 2018, Nifty is not expected to make any meaningful directional moves
We expect the market to trade in a capped range
However, the price action around the 200-DMA level will be important to watch as any breach below this will invite some short-term weakness
in the already troubled market
We recommend maintaining modest exposures while avoiding any major aggressive bets on either side
A cautious approach is advised for the day.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory
He can be reached at milan.vaishnav@equityresearch.asia)
