INSUBCONTINENT EXCLUSIVE:
Indian equity market saw a volatile session on Monday as the Nifty continued to oscillate in a range, but continued with its corrective
The market made a negative start to the week, as Nifty ended 67.70 points or 0.63 per cent down.
The NSE benchmark slipped below its short
term 20-DMA and the overall structure of the charts suggest that such tentative mood of the market is likely to persist for some
time.
Significant amount of short positions were seen being added in the system
Given the amount of shorts, we might see a modestly positive opening to the trade on Tuesday.
However, the Nifty continues to remain
vulnerable to selling pressure at higher levels until some fresh area formation helps prepare a base for Nifty for a fresh upmove
Tuesday will see the levels of 10,650 and 10,735 acting as immediate resistance levels
Supports may come in at 10,580 and 10,540 zones.
The relative strength index (RSI) on the daily chart is 50.4630
RSI stays neutral and shows no divergence against the price
The daily MACD stays bearish while trading below its signal line
A big black candle emerged
This remains significant as it occurred near the 20-DMA and this gives credibility to the resistance area in the present situation.
If we
look at the pattern analysis, Nifty has slipped below the 20-DMA while lending credibility to the short-term resistance area
The Nifty remain in very close vicinity of the 100-DMA support area and is expected to continue to spend some more time in the present broad
range.
Overall, though a modestly positive opening is not ruled out on Tuesday, the Nifty still continues to remain vulnerable to some
selling pressure at higher levels.
However, given the amount of shorts that exist in the system, it is likely to keep the overall downsides
All this translates into a likely rangebound session with some amount of volatility remaining ingrained.
Cautious view is advised for the
day.
STOCKS TO WATCH: Short positions were added in stocks of HDFC Bank, Powergrid, Bank Of Baroda, BHEL, Adani Power, Infibeam, ITC, DHFL,
Nalco, Vedanta, Jain Irrigation, Dish TV and Ambuja Cements.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity
Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
