INSUBCONTINENT EXCLUSIVE:
The domestic equity market continued to advance helping Nifty to move higher and end with gains even as continued to stay in the Rising
Nifty saw a flat start, but went to test the 9,300 mark by afternoon gradually.
At one point, the Nifty had given up much of the gains only
Bank Nifty outperformed Nifty, and the bulk of the gains in the first line index came from financial stocks.
Weekly options expiry also
dominated the proceedings
Nifty finally closed with a net advance of 126 points, or 1.38 per cent
Nifty is currently trading in the Rising Wedge formation, and it is moving towards the upper trend line of this area pattern, which is
likely to trigger some resistance
Any move higher from this point is expected to invite some profit-taking.
Volatility index INDIA VIX declined another 8.39% to 39.2300
Each move higher from the current level now will need to be dealt with a high degree of caution.
Nifty is likely to see the 9,350 and 9,385
acting as key resistance on Friday, while supports will come in at 9,170 and 9,100 levels
Any corrective move is widen the trading range.
ET CONTRIBUTORSPrice oscillator indicator PPO remains positive on the daily charts
Relative Strength Index (RSI) stood at 51.34
It has made a fresh 14-period high, which is a bullish signal
The RSI is neutral and does not show any divergence against the price
The daily MACD remains bullish, and it trades above the signal line.
Pattern analysis continues to show Nifty is trading in the Rising Wedge
Such area patterns are often formed after sharp bear market rallies and are supposed to be dealt with cautiously.
Given the present
technical setup, we recommend utilising any up-move, if it occurs, to protect profits on existing positions
Instead of chasing the up-move with fresh purchases, it would be prudent if we protect profits vigilantly
The main reason behind this approach is that the higher the market goes, the closer it will get to the upper trend line resistance to the
This is likely to trigger profit taking at higher levels
While guarding profit at current and higher levels, a cautious approach 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)This article first appeared/also appeared in
https://economictimes.indiatimes.com/markets/stocks/news/trade-setup-nifty50-enters-a-key-profit-taking-zone-tread-carefully/articleshow/753
