INSUBCONTINENT EXCLUSIVE:
Indian stock market had a disappointing and a stressful start to the week on Monday
The NSE benchmark Nifty ma naged to bounce back from its 50-DMA in the previous two sessions and this level was expected to hold as support
today.
However, Monday's gap-down start to the trade saw Nifty opening below this crucial support
In a feeble attempt to recover, the recovery halted at the 50-DMA, which acted as a resistance
Though Nifty ended over 205 points down, the intraday range stood at mere 40 points.
Indian stocks have two big issues to deal with on
Tuesday in form of state elections results and sudden exit of the RBI Governor Urjit Patel
We expect a troubled start to the trading session on Tuesday and see volatility remaining ingrained in the market, as investors start
digesting election results and also the resignation of the RBI Governor.
Given these two external developments to deal with, it will make
little sense to analyse the technical setup in isolation
However, the levels of 10,550 and 10,610 are expected to resist any upmove
fresh 14-period low, which is bearish
The daily MACD has shown a negative crossover and it is now bearish while trading below its signal line
A falling window occurred on the candles.
This is usually a result of a gap and often results into continued downside
Resignation by the RBI Governor is certainly not a good sign
Such resignations are taken with a grave and serious concern, as they are usually tendered as a note of protest
Any positive outcome from the state election results is likely to cushion any fall market may suffer
saw Nifty losing over 200 points, but the intraday range remained very capped, as the index oscillated in a 40-point range.
At this
juncture, we need to take a more level-headed view and not participate in the anxiety that the market is suffering from.
We recommend
avoiding panic reaction, and aggressive shorts as a technical pullback may be triggered with slightest of positive news
We strongly suggest remaining very light on exposures and continue buying defensive stocks with the downsides that market offer
Cautious view is advised for the day.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory
He can be reached at milan.vaishnav@equityresearch.asia)
