Trade setup: Nifty may find stiff resistance in 12,045-12,100 zone

Rising geopolitical tensions in West Asia made the domestic stock market worst performer among its peers on Monday, with NSE Nifty taking a big hit. The index saw a gap down opening and remained under pressure throughout the day. After slipping below the crucial 12,100 level, the 50-stock pack finally ended with a loss of 233.60 points or 1.91 per cent at 11,993.05.

The headline index on Monday slipped below the Double Top level at 12,100, which has resulted in the failure of the earlier breakout. As anticipated, volatility too surged with India VIX surging 16.40 per cent to 14.78 level.

In the coming sessions, the price action of Nifty against the 12,100 level will be very important.


Tuesday’s session is likely to see a jittery start even as the market may attempt to stabilise itself. The 12,045 and 12,100 levels will act as resistance, while support may come in at 11,950 and 11,910.

The Relative Strength Index (RSI) on the daily chart stood at 43.95 and marked a fresh 14-period low, which is bearish.

The daily MACD was bearish as it traded below its signal line. A large black candle was formed on the charts, which shows intensity of selling during the day.

As per pattern analysis Nifty has slipped below the 12,100 level, which was supposed to act as support. Apart from this, the index has also tested the 50-DMA, which is at 12,014.

All in all, Nifty may attempt to stabilise on Tuesday even if a jittery start cannot be ruled out. The index has ended a notch below the 50-DMA, but remains within its filters. In an ideal condition, the 50-DMA should act as support even if it is meant to be just for the short term.

We would advise traders not to use volatile swings to make purchases, but wait for the market to stabilise. A highly cautious 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)