INSUBCONTINENT EXCLUSIVE:
The domestic stock market continued to consolidate, as NSE Nifty fell for a third straight session on Tuesday
The equity market saw a mildly positive start, but slipped into the red after a few minutes
The index continued to grow weaker as the day progressed and finally settled below the 12,000 level, with a loss of 54 points or 0.45 per
cent at 11,994.20.
Indian stock market is trading at a crucial juncture
F-O data showed creation of fresh shorts, as Nifty futures open interest saw a net increase of 9.46 lakh shares or 6.96 per cent
The short-term 20-DMA, which is at 11,974, stayed defended
It will be an important level to watch out for going ahead.
Options data showed that 12,000 had the maximum builtup of Call open interest,
levels act as resistance points
Supports may come in at 11,950 and 11,900.
The Relative Strength Index (RSI) on the daily chart stood at 56.60 and marked a fresh 14-period
It also showed a bearish divergence against the price.
The daily MACD was bearish and traded below its signal line
The Percentage Price Oscillator (PPO) remained negative
Apart from a black body, no other formations were seen on the candles.
As per pattern analysis, the 12,103 level, which marked as a major
double top resistance, continued to hold as of now
Nifty, despite making an incremental high, has once again slipped below 12,103 and has not yet achieved any breakout.
All in all, despite
the recent corrective moves, the undercurrent remained strong
The market is facing consolidation rather than a correction, and it is likely to stay limited as of now.
We again advice traders to avoid
Instead, downsides should be used to make select purchases
It would be important for Nifty to stay above the 20-DMA level of 11,974 on a closing basis.
A cautiously positive outlook is advised for
the day.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research - Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
