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  • Milan Vaishnav, CMT, MSTA

Friday Likely To See Cautious Trade; Caution Might Prevail Ahead Of Extended Weekend

A range bound session was witnessed on the bourses on Thursday as the expiry of the February derivative series remained less volatile than expected. The markets witnessed a stable start to the day but soon pared its opening gains. Thereafter, the markets spent the most part of the session in a defined and limited range. Though some volatility was witnessed in the last hour of the trade, it too remained in a defined range. The headline index NIFTY ended the day with minor loss of 14.15 points or 0.13%.

As we step into Friday’s trade, we expect the Markets to remain cautious and not show any major upsides. It continues to trade below its 50 and 200-DMAs and zone along with 10940 is likely to act as important resistance points on closing basis. Moreover, amid geopolitical tensions, no major buying may be seen over the extended weekend as Monday is a trading holiday.

Friday is likely to see the levels of 10860 and 10890 acting as immediate resistance points. Supports come in at 10750 and 10680 zones.

The Relative Strength Index (RSI) on the daily chart is 48.9494. It remains neutral and shows no divergence against the price. The daily MACD continues trade above its signal line. A black body emerged on candles; it’s occurring near the resistance zone of 50 and 200-DMAs reinforce the credibility of these two resistance points.

Though the markets continue to trade in the broad range and remain above the 10680-10720 zone which is the rising trend line support, the NIFTY has shown some cracks appearing. Its failure to move past the 200-DMA, coming off from 10940 level and thereby creating a lower top might make immediate up moves difficult in the immediate short term. There are also strong possibilities of the markets session volatile profit taking bouts from higher levels in event of any up moves. Amid continuing geopolitical tensions across the borders, we recommend remaining light on exposures and avoid taking any major positional calls over the extended weekend. A cautious view is advised for the day.

Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst Member: (CMT Association, USA / CSTA, Canada / STA, UK) | (Research Analyst, SEBI Reg. No. INH000003341)