INSUBCONTINENT EXCLUSIVE:
The domestic equity market on Tuesday extended its pullback rally of the last three sessions
The NSE benchmark Nifty after making a positive start, spent the rest of the session within a 60-point range amid fall in volatility
After oscillating in a defined and a capped range, the index settled with a gain of 72.25 points or 0.69 per cent.
The investors on Dalal
Street are likely to tread with caution on Wednesday, as they head into a truncated week.
On Wednesday, the market is expected to make a
positive start and extend its rally
But this will depend on whether there are any fresh negative news in overnight session to deal with.
However, expect some caution to weigh
in as Thursday remains a trading holiday for Indian markets.
Nifty is likely to face resistance at 10630 and 10720 levels on Wednesday
Supports may come in at 10,520 and 10,450.
The RSI on the daily chart stood at 41.2200 and it has marked a fresh 14-period high, which is
RSI also showed bullish divergence against the price
The daily MACD was bearish, as it traded below its signal line
No significant formations were observed on the candles.
As per pattern analysis, after getting deeply oversold and ending outside the lower
Bollinger band, the Nifty has comfortably pulled itself back inside its normal zone of volatility.
At present, the index is still some
distance away from its 200-DMA level.
Overall, the market is likely to extend its upmove, and the sectors, which had taken a beating over
the last couple of weeks, may put a decent show ahead.
Traders can expect that despite intermittent bouts of profit taking and some ranged
consolidation, the Nifty should be able to test its 200-DMA.
However, investors may get little cautious ahead of the close on Wednesday, as
following session is a holiday for the Indian markets.
We recommend making select purchases with each move that the market offers
In event of any consolidation or profit taking, the downsides may remain limited which the area of 10,380-10,400 providing good support to
the Nifty, not just on Wednesday, but also on subsequent sessions.
STOCKS TO WATCH: Long positions were seen being added in Hindalco,
Aurobindo Pharma, Biocon, Ashok Leyland, NCC, Hindalco, Federal Bank, State Bank of India, ITC, ICICI Bank, Tata Motors, Axis Bank, NBCC and
Tata Power.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
