Indian Markets had a short one-hour Mahurat Trading yesterday and the NIFTY stayed buoyant all throughout the session and ended with modest gains. The Markets saw a positive opening and expectedly remained sideways for the hour trading in a very capped range. The benchmark Index NIFTY50 ended the session with gains of 68.40 points or 0.65%.
Even if the session remained short, it traded very much on expected lines. We had mentioned about the possibility of the Markets continuing to resist the 10600-10650 zones. NIFTY resisted exactly in this area and ended the day below 10600-mark.
Having said this, we expect a positive or at least a stable start to the day. Though Friday’s session will open after a gap of one day and the Markets might align itself with the global markets, the zones of 10600-10730 will remain critically important as the markets will approach its stiff resistance area for the near term.
Friday is likely to see the level of 10650 and 10730 acting as immediate and stiff resistance for the Markets. Supports come in at 10530 and 10470 zones.
The Relative Strength Index – RSI on the Daily Chart is 52.9874 and it has marked a fresh 14-period high which is bullish. It shows no divergence against the price. The Daily MACD remain bullish while trading above its signal line. No significant formations were seen on Candles.
If we look at the pattern analysis, after suffering a sharp corrective decline from month of September, the NIFTY has formed a small falling channel while attempting to form a base and pull back. The pullback has a stiff resistance in form of falling trend line and the 200-DMA which remain in the 140-point range. This zone is likely to cause turbulence and instill some volatility in the Markets.
All and all, we do expect a stable start to the trade and expect the NIFTY to make attempts to move past the 10600-10650 zones. However, even if it manages to trade in this zone, we will need to approach the Markets with great caution. This 140-point range is expected to remain quite turbulent for the Markets and each up move shall have to be used to protect profits at higher levels. We expect some volatility to get ingrained at higher levels. Despite up moves, there are chances that the NIFTY might get pushed into some consolidation at higher levels. We recommend approaching Markets with great caution and protect gains at higher levels.
Milan Vaishnav, CMT, MSTA, Consulting Technical
Member: (MTA, USA / CSTA, Canada / STA, UK) | (Research Analyst, SEBI Reg. No. INH000003341)
Tel: +91-70164 32277 | |