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  • Milan Vaishnav, CMT, MSTA

Tuesday Trade Set-up: NIFTY's Behavior Against This Level Continues To Remain Critically Important

On Friday as well, the NIFTY continued with its tendency of a sharp move on either side towards the close and this time, it was on the upside. The Markets saw a positive opening and continued trading with capped gains for the most part on Friday. While maintaining gains, the NIFTY traded in a range and remained in sideward trajectory for the most part of the day. The last hour and half of the session saw the index seeing a sharp surge and the NIFTY ended the day with gains of 112.85 points or 0.97%.

We are in a truncated week as the Markets will open after a day of holiday. After a working day on Tuesday, Wednesday again is a trading holiday on account of Maharastra Day.

As we approach Tuesday, NIFTY may see a flat to modestly positive opening as it will adjust to global trade. Despite a sharp surge on Friday, the NIFTY has ended just short of the all-important 11760 level. In event of any positive opening, it would be very crucial for the markets to keep its head above 11760. In event of any negative opening, this level will continue to post stiff resistance to the markets.

Tuesday will see the level of 11760 and 11855 acting as immediate resistance points. Supports come in at 11680 and 11610.

The Relative Strength Index (RSI) on the weekly chart is 60.2939 and it continues to show bearish divergence against the price. The daily MACD stays bearish and trades below its signal line. A white body was formed on candles; apart from this, no major formations were seen.

As the level of 11760 has not yet been taken out, this level remains one of the key levels to watch for. Any moves on the upside may see the NIFTY attempting incremental highs but a comprehensive breakout may still continue to elude us. Any slip below 11760 will see the markets pushed into corrective mode once again. With Wednesday being a trading holiday once again, the volumes may remain slightly on the lower side. We continue to reiterate an extremely cautious view on the markets unless it achieves a clean and sustainable breakout.

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