Avoid major exposures and continue to adopt highly sectoral and stock-specific approach.
The Friday’s session remained sluggish as the market consolidated with a negative bias. The Nifty did not take any directional cue and continued to oscillate back and forth in a limited range. The index closed with a modest loss of 22.80 points or 0.21 per cent.
Nifty continued to show exhaustion at the higher levels. We expect a tepid start to the trade and expect the index to continue to consolidate with a mild corrective bias. Despite no structural breakdown on the charts, we do not expect market to post any runaway rise so soon.
With Monday’s session expected to see a tepid start to the trade, the levels of 11,100 and 11,160 will act as immediate resistance. Supports may come in at 11,000 and 10,910.
The daily RSI stood at 61.9540 and it remained neutral, showing no divergence against the price. The daily MACD was bullish and traded above its signal line. However, its trajectory continued to remain flattish.
A spinning top appeared on the candles. Though not classical, it closely resembles a doji. Any such formation conveys the indecisive mindset of the participants and often show exhaustion if it occurs after an upmove. This, however, requires confirmation on the next trading day.
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As per pattern analysis, it appears that Nifty is in a resistance that was created between 10,960 and 11,118. Though Nifty has managed to remain above the 10,950 level, it has not yet negotiated this resistance zone.
All in all, unless the level of 11,118 is taken out comprehensively, the index will not see any major upmoves. The longer it remains below this area, higher will be the probabilities of it continuing to suffer profit taking bouts at higher levels.
Avoid major exposures and continue to adopt highly sectoral and stock-specific approach until market establishes a firm directional course. A cautious view is advised for the day.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
