In Fridays volatile trade, domestic equity market attempted to stabilise, as it halted its decline near confluence of two pattern supports, and 50-DMA which currently stands at 10,646.
The market saw a positive start, but soon lost ground to slip into negative territory.
Thereafter, market spent much of session oscillating within a defined range.In last hour-and-a-half of trade, Nifty pulled back once again to end near high point of day and settle 55.10 points, or 0.52 per cent, higher.A positive start is expected on Monday.
We are likely to see market continue with pullback witnessed in last hour of trade on Friday.
The broader market had outperformed in previous session, and this has kept market breadth favourable.
We will also have positive clues from Fridays rally in US stock to aid a positive start to Mondays trade.
The 10,787 and 10,865 levels are likely to act as immediate resistance for Nifty while supports may come in at 10,680 and 10,630 levels.The Relative Strength Index (RSI) on daily chart stood at 48.4168.
It remains neutral and shows no divergence against price.
The daily MACD is bearish as it trades below its signal line.
On candles, Nifty is seen holding on to its 50-DMA and to confluence area of two pattern supports.The 50-pack did not do much to gain some ground in Fridays trade, and it remains trapped in a range.
For Fridays pullback to result in a sustainable breakout, Nifty still must move past its 200-DMA and 100-DMA, which have almost become a proxy trend line for index.
However, with Nifty taking support at its 50-DMA, we can expect market to inch higher.
Traders should avoid shorts but can make select purchases.
Stock-specific out-performances can be expected from favourably rotating sectors like PSU banks, consumption, infrastructure and realty.(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara.
He can be reached at milan.vaishnav@equityresearch.asia)