INSUBCONTINENT EXCLUSIVE:
The NSE benchmark Nifty extended losses for a third straight session on Monday and ended with a fall of 57.35 points or 0.53 per cent.
At
one point, index was down nearly 100 points, but buying in second half pushed up stocks a bit, as Nifty managed to hold on to its 50-DMA at
close.
The market continued to remain in present area formation, and with range getting narrower, negative bias is weighing heavily on
index.
We expect a flat start to trade on Tuesday, but maintaining level above 10,700 will be important for Nifty
The 50-DMA, which is at 10,717 will continue to remain an important support to watch for at close.
Tuesday is likely to see levels of 10,800
and 10,855 acting as immediate resistance
supports may come in at 10,695 and 10,640.
The Relative Strength Index (RSI) on daily chart stood at 47.9280 and it continued to remain
neutral showing no divergence against price
The daily MACD was bearish, as it trades below its signal line
No significant formations were observed on candles.
As per pattern analysis, Nifty exhibited a weak bias and mildly broke down from this
However, it pulled itself back and remained on support of lower rising trend line of present formation on charts.
Overall, though we expect
a quiet start to trade on Tuesday, opening levels and trajectory that Nifty forms after opening would be crucial.
We expect volatility to
persist as index remained trapped between its DMAs
It has taken support at its 50-DMA at close, which was at 10,717 and remained below its 200-DMA and 100-DMA, which are at 10,805 and 10,848
respectively.
We recommend avoiding heavy exposures on either side
Stock-specific outperformance will remain
The session will remain highly sector and stock specific as sectoral indices remained in a narrow congestion zone
We suggest to remain light on exposures and also protect profits at higher levels.
(Milan Vaishnav, CMT, MSTA is Consultant Technical
Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
