In a listless and lacklustur day for the Indian equities, the market chose to consolidate for the entire day and spent the entire session in a sideways trajectory. The NIFTY opened on a modestly positive note; it got a little stronger and marked the intraday high point in the early minutes of the trade. After that, the Index slipped in the negative territory. The markets took no directional cue after that and continued oscillating in a limited and defined range while heading in no specific direction. After failing to establish any trend, and after rebounding a bit from the lower levels, the headling index ended the day with a net loss of 24.30 points (-0.13%).
Tuesday’s session was right on the anticipated lines. The MidCap universe grossly outperformed the frontline NIFTY; this trend is likely to continue throughout this week and we will see the midcaps and overall broader markets continuing to relatively outperform the front line indexes. Some Call writing was seen at 18100 and 18200 strikes; the level of 18200 has the highest Call OI accumulation which makes this an immediate resistance point for the markets. Highest Put OI exists at 17900. For the markets to resume their up move and get stronger, staying above the 1800 levels will be important.
Wednesday is likely to see the levels of 18100 and 18165 acting as immediate resistance points. The supports come in at 18000 and 17930.
The Relative Strength Index (RSI) is 54.44; it is neutral and does not show any divergence against the price. The daily MACD is bearish and below the signal line. No major formations were noticed on the Candles except a modestly sized candle with a relatively long lower shadow.
The pattern analysis shows that the NIFTY is now above the falling trend line resistance. This trend line starts from the high point of 18600 and subsequently joined the lower high of 18350. Given the falling nature of this trend line, the NIFTY is now above this; in fact, it took the support at this trend line and staged a modest recovery after that.
All in all, the analysis for Wednesday remains much on similar lines. So long as the Index is able to keep its head above the 18000 levels, there are greater possibilities of the market piling up some more gains and extending its up move. However, any slip below the 18000 levels will keep the markets under some ranged consolidation. The broader markets are expected to continue relatively outperforming the frontline indexes. We recommend avoiding excessive leveraged exposures and continue to approach the markets on a highly selective note.
This was first published by The Economic Times.
Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst
Member: (CMT Association, USA | CSTA, Canada | STA, UK) | (Research Analyst, SEBI Reg. No. INH000003341)
