INSUBCONTINENT EXCLUSIVE:
high before ending with mild gains
Nifty saw a stable opening and after a minor blip in the morning, it remained in the positive territory for most of the day
The market traded in a capped range while maintaining modest gains
It grew stronger in late afternoon trade
Nifty ended the day posting a modest gain of 36.10 points, or 0.32 per cent.
As evident from the charts, Nifty faced pattern resistance of
the falling trend-line and also ar the 100-DMA, which is currently at 11,408
Nifty is grappling with a weak technical setup, and in the current context, the 200-DMA has become a very crucial level to watch over the
Any breach of this level, which is 11,273 at present, will see Nifty extend its downside.
On Tuesday, Nifty is likely to see a tepid start
The 11,400 and 11,435 levels will act as key resistance, while supports will come in at 11,270 and 11,210
In the event of any downside, the trading range is expected to remain broader than usual.
The RSI on the daily chart stands at 54.19; it
remains neutral and does not show any divergence against price
The daily MACD is bearish, and it trades below the signal line
A Spinning Top occurred on the candles
The formation of a Spinning Top has a very small real body and signals lack of conviction and indecisive behaviour of the market
participants.
From pattern analysis, it appears that Nifty has given up 50% of its most recent pullback, and it is now consolidating in a
It has faced resistance at the 100- DMA and is struggling to keep its head well above the 200-DMA at 11,273.
Nifty will not have any
sustainable up-move unless it moves past the 11,450 level convincingly and closes above that mark
On the other hand, staying above the 200-DMA will be critically important for Nifty
Otherwise, it is bound to get much weaker than now
We reiterate not chasing any up-moves as Nifty remains prone to bouts of profit taking from higher levels
We recommend avoiding any significant exposure to the market until a firm directional bias is established
Continue to approach the market on a highly cautious note.
(Milan Vaishnav, CMT, MSTA, is a Consultant Technical Analyst and founder of
Gemstone Equity Research - Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
