The NSE benchmark Nifty extended losses for a third straight session on Monday and ended with a fall of 57.35 points or 0.53 per cent.At one point, index was down nearly 100 points, but buying in second half pushed up stocks a bit, as Nifty managed to hold on to its 50-DMA at close.The market continued to remain in present area formation, and with range getting narrower, negative bias is weighing heavily on index.We expect a flat start to trade on Tuesday, but maintaining level above 10,700 will be important for Nifty.
The 50-DMA, which is at 10,717 will continue to remain an important support to watch for at close.Tuesday is likely to see levels of 10,800 and 10,855 acting as immediate resistance.
supports may come in at 10,695 and 10,640.The Relative Strength Index (RSI) on daily chart stood at 47.9280 and it continued to remain neutral showing no divergence against price.
The daily MACD was bearish, as it trades below its signal line.
No significant formations were observed on candles.As per pattern analysis, Nifty exhibited a weak bias and mildly broke down from this formation intraday.
However, it pulled itself back and remained on support of lower rising trend line of present formation on charts.Overall, though we expect a quiet start to trade on Tuesday, opening levels and trajectory that Nifty forms after opening would be crucial.We expect volatility to persist as index remained trapped between its DMAs.
It has taken support at its 50-DMA at close, which was at 10,717 and remained below its 200-DMA and 100-DMA, which are at 10,805 and 10,848 respectively.We recommend avoiding heavy exposures on either side.
Stock-specific outperformance will remain.
The session will remain highly sector and stock specific as sectoral indices remained in a narrow congestion zone.
We suggest to remain light on exposures and also protect profits at higher levels.(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara.
He can be reached at milan.vaishnav@equityresearch.asia)