Tuesday’s session turned out to be exactly on the expected lines. The NIFTY not only resisted the mentioned levels but also some corrective activity taking place during the day. The markets saw a positive start to the day, NIFTY marked its intraday high in the opening seconds of the session. It soon pared its gains and traded flat near the previous close. The market got gripped by a corrective way after that; it not only pushed the NIFTY in the negative territory but made it weaker as well. The index slipped below the 17600-mark. However, the last hour of the day saw the NIFTY rebounding over 160-odd points from the low. It finally ended with a net loss of 106.50 points (-0.60%).
From the technical perspective, Tuesday’s session has temporarily marked the zone of 17900-17950 as an intermediate top for the markets. For a fresh up-move to occur, NIFTY will have to move past the 17950 level convincingly; until this happens, we will see the markets consolidating in a broad, but defined range. Volatility continued to edge higher; INDIAVIX rose by 2.67% to 18.5350. We enter the penultimate day of not only the weekly options expiry but the monthly derivative expiry as well. The markets will stay influenced by the rollover-centric activities over the next two sessions.
Wednesday is likely to see the levels of 17800 and 17845 acting as resistance points. The supports come in at 17700 and 17630 levels.
The Relative Strength Index (RSI) on the daily chart is 70.98; it remais neutral and does not show any divergence against the price. The daily MACD has again resported a negative crossover; it is now bearish and below the signal line. A candle with a long lower shadow emerged. The occurrence of such candle near the high point may temporarily stall the up move. However, this will also need confirmation on the next trading bar.
With the markets showing first signs of taking some breather and consolidating at higher levels, the zone of 17900-17950 becomes an intermediate top and most crucial resistance zone. Unless this zone is taken out, no runaway up moves should be expected in NIFTY.
We will see the broader markets trying to relatively outperform the frontline indexes. However,r the texture of the markets will get more stock-specific than it ever was. We can expect some sector-specific shows as well with sectors like select Banks, PSUs, Auto, etc., putting up a resilient show.
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)
