Recovering from the heavy battering in the previous session on Saturday, the domestic stock market managed to end mildly in the green.
NSE Nifty as expected took support at its 200-DMA, which is at 11,655, on Monday.
After trading in a broad range, the headline index ended with a modest gain of 46.05 points or 0.39 per cent at 11,707.90.The analysis for Tuesdays session remains on the similar lines.
Nifty has held on to its support at 200-DMA, which will be key for the market in the short term.
The index is expected to consolidate with its upside range at 100-DMA, which is at 11,747.After two sessions, the market is expected to see a relatively stable start on Tuesday, with 11,740 and 11,795 levels acting as resistance.
Support may come in at 11,665 and 11,630.The Relative Strength Index (RSI) on the daily chart was 32.86 and stayed neutral, showing no divergence against the price.ETMarkets.comThe daily MACD was bearish and traded below its signal line.
A small white body was formed on the candles.
However, since it emerged near the 200-DMA, it has attempted to validate this level as a potential near-term support.As per pattern analysis, Nifty has broken down from the broadening formation, and has taken support at 200-DMA at 11,655.
This support will be crucial in the immediate term.
If the index slips below 200-DMA, it may invite more weakness.All in all, the market is done reacting to Budget 2020.
However, for this to continue, holding on to 200-DMA will be crucial.We would recommend traders to use declines, if any, to make fresh purchases.
However, it will also be important to stay stock specific and avoid aggressive positions.
A cautiously positive 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)