INSUBCONTINENT EXCLUSIVE:
In an extremely bearish session on Wednesday, NSE Nifty ended below the previous low of 8,555, which it had formed a couple of days back
The domestic stock market made a stable opening, however, the index soon pared all its gains
or 5.56 per cent at 8,468.80.
If we read the present technical setup in isolation, a probability of a mild technical pullback cannot be
However, analysing the domestic situation in isolation and preempting a rebound will not help
The market will continue to remain affected by global weakness
An overnight weakness in the US stocks will weigh on Indian markets too.
The volatility index, or India Vix, rose marginally by 1.64 per
daily chart was at 15.15 and it continued to remain deeply oversold
The indicator showed a bullish divergence, as it did not make a fresh 14-period low in line with Nifty
The daily MACD stayed deeply bearish, while trading below and much away from the signal line.
Again, the technical indicators on the charts
are deeply oversold.
However, it would be dangerous to attempt to find a bottom without keeping the global markets scenario in
perspective.
We would recommend trading on either side with great caution
There are chances of some technical pullback, but again, the sustainability of such rebounds will be a big question mark
We recommend continuing to approach the market with utmost caution
Bargain buying should be attempted after at least a couple of faint signals of potential bottoms are in place.
(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)
