INSUBCONTINENT EXCLUSIVE:
In a session marked by high volatility and wide trading range, Indian stock on Thursday fluctuated on both sides and finally ended in the
negative for the fourth day in a row
The market witnessed a sharply lower opening amid weak global setup
After opening gap down, NSE Nifty attempted to recover its losses
By late afternoon, the index rebounded over 600 points from its low point, however, by close, the index pared its gains and ended with a net
The weekly options expiry, too, played the dominant role in the trade.
The volatility surged, as India VIX spiked 12.89 per cent to 72.20,
and trades near lifetime high levels
Short covering-led rallies can remain deceptive
see a quiet start to the trade
However, the upsides are expected to remain limited even if there is a technical pullback
The 8,350 and 8,575 levels will act as strong resistance points and supports will come in at 8,010 and 7,800.
The Relative Strength Index
(RSI) on the daily chart was at 14.28 and stayed neutral, showing no divergence against the price
The RSI remained in oversold territory.
The daily MACD remained deeply bearish, as it traded far below its signal line.
As per pattern
analysis, Nifty has continued its unabated downside despite staying in oversold territory.
Just like strong bull markets remain overbought
for some time, a market with a strong downtrend continues to stay oversold.
The analysis for Friday remains on the similar lines
The market is on its way to log one of the biggest weekly losses if no meaningful technical pullback occurs.
Also, Indian equities will
continue to remain uniformly affected by the global trade setup, which continues to remain very fragile
We strongly recommend staying away from making any large purchases and wait until some consolidation occurs, which may point towards some
Until this happens, it would be best to avoid placing any major directional bets.
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
