While trading on anticipated lines, the Indian equities not only consolidated but also remained highly influenced by the monthly expiry of the current month’s derivative series as well. The trading range for the markets remained quite narrow; NIFTY stayed in a defined range before ending the day on a modestly negative note. The NIFTY opened higher and marked the high point of the day in the first hour of the trade. The markets could not maintain those gains and the index slipped into negative territory by the afternoon only to recover later. The recovery took the markets into the green but that was not sustained as well. The NIFTY slipped again and finally ended the day with a minor loss of 33.50 points (-0.19%).
The session remained typically influenced by the rollovers. The levels of 17400 saw heavy put writing for the entire day; the levels of 17500 had a maximum accumulation of Call OI that did not change over the past several days. All this kept the markets below 17500 levels. As of now, from a technical perspective, the level of 17500 continues to stay as a resistance point; a sustainable up move shall happen only if this level is taken out convincingly. Not only on Friday, but for the next few coming days, NIFTY’s behavior against the levels of 17500 will be crucial to watch for any sustainable directional move.
Friday is likely to see the levels of 17500 and 17585 acting as potential resistance points. The supports come in at 17430 and 17310 levels.
The Relative Strength Index (RSI) is 59.12; it remains neutral and does not show any divergence against the price. The daily MACD is bullish and stays above the signal line. A small black body emerged on the charts; no other important formations were observed.
The most recent up move has seen the NIFTY moving past and trading above all its key moving averages. With these levels now being taken out, the level of 17300 is expected to act as the most immediate support for the markets on a closing basis.
All in all, some consolidation may again be on the charts; the most recent up moves are seen lacking the strength and momentum that is otherwise required for any sustainable directional trend to begin and sustain. Having said this, the analysis continues to remain on similar lines. The markets may again find themselves prone to profit-taking bouts unless they move past the 17500 levels convincingly. Until this happens, it is strongly suggested to continue approaching 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)
