Indian Equity Markets had a somber beginning to the week as the Markets stalled its technical pullback. The benchmark Index NIFTY50 opened on a negative note and spent the entire session in a very limited range. We had mentioned about the possibility of the Markets getting pushed into some consolidation as it approaches the overhead resistance area. While the session remained much on anticipated lines, the NIFTY ended the day losing 29 points or 0.27% after rebounding a bit from the lows of the day.
We expect a stable start to the Tuesday’s trade and expect the consolidation to continue. NIFTY is facing stiff resistance in the 10600-10710 zones going ahead from here and we expect this area to continuing posing some resistance to the Markets in the immediate short term. The behavior of the Markets vis-à-vis the zone of 10600-10710 is critical to watch for.
Tuesday is likely to see levels of 10600 and 10665 acting as immediate resistance area. Supports come in 10475 and 10420 zones.
The Relative Strength Index – RSI on the Daily Chart is 50.2965 and it remains neutral showing no divergence to the price. The Daily MACD stays bullish while trading above its signal line. No significant formations were seen on Candles.
If we look at pattern analysis, the NIFTY has formed a large trading zone for itself. This is a 600-point wide falling channel with the upper range lying in the 10600-10710 zones.
Overall, the NIFTY not correcting despite a strong pullback over past couple of sessions is a sign of some strength in the Markets. Instead of witnessing a correction, it just stalled its up move and chose to consolidate. However, despite such behavior, it is important for the Markets to move past the 10600-10710 zones. Unless this happens, just like Monday, we will continue to see the Markets remaining vulnerable to some weakness and some volatile range bound oscillations. Cautious outlook is advised for the day.
STOCKS TO WATCH
Long positions were seen being added in stocks like State Bank of India, Ashok Leyland, Adani Power, ONGC, Tata Motors, Hindalco, Aurobindo Pharma, PVR, National Aluminum, Gail, Reliance, NCC, PFC, Motherson Sumi and Bharti Airtel.
Milan Vaishnav, CMT, MSTA, Consulting Technical
Member: (MTA, USA / CSTA, Canada / STA, UK) | (Research Analyst, SEBI Reg. No. INH000003341)
Tel: +91-70164 32277 | |