After the first two days of the week that was immensely volatile and with large trading ranges, it was for the third day in a row that the markets traded on a listless note and ended the day with a modest loss. The NIFTY opened negative but soon crawled into the positive territory by the afternoon trade. The index managed to maintain its gains after being off its opening low; however, it continued to trade more or less in the sideways trajectory. In the last hour and a half of the session, the NIFTY drifted again in the negative. However, since there was a total absence of any directional bias on either side, the headline index ended the day with a modest loss of 28.30 points (-0.16%).
Given the global trade setup and the fluidity of the situation concerning the conflict between Russia and Ukraine, there are possibilities of the markets seeing a tepid opening; however, there are chances that the trend improves if primary support levels are respected. The weekly options data show the likely trading range for the NIFTY as 17000-17500 unless there is a tactical shift on the lower side. Monday may have limited downsides despite lower opening if the NIFTY is able to keep its head above 17200 levels; if this level is violated, then some incremental weakness cannot be ruled out.
Monday is likely to see the levels of 17330 and 17435 acting as likely resistance points. The supports come in at 17200 and 17160 levels.
The RSI on the daily chart stands at 46.63; it continues to remain neutral and does not show any divergence against the price. The daily MACD is bearish and stays below the signal line. Apart from a small white body that emerged, no other important formations were seen on the charts.
The pattern analysis shows that the NIFTY is taking support on the falling trend line for the last three sessions; this makes it important that the index does not violate the previous low point. Any slip below 17200 on a closing basis will open up some more gaps on the downside.
Overall, as mentioned, the geopolitical tensions remain fluid; and contradictory inputs will keep emerging on that front with uncertain outcomes. Also, from the technical perspective, the markets remain in a large trading range and it is unlikely that it forms any major sustainable directional bias over the coming days. It is recommended that large exposures on either side must be avoided. Positions may be kept at modest levels; a cautious and defensive approach is advised for the day.
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)
