We had mentioned about possibility of a sharp move by the
benchmark NIFTY50 on either side in our yesterday’s note. On Thursday, the
Markets saw a sharp volatile selling
bout from the higher levels while the NIFTY ended the day with net loss of
19.25 points or 0.19%. Important thing that was observed was the reduction /
shrinkage of NIFTY Futures premium which came along with reduction in Open
Interest. This very much implies that a section of the Market participants
which were evenly poised are losing patience in a heavily range bound Markets.
The levels of 10170 and 10230 will continue to act as major
resistance levels for the Markets. Supports come in at 10065 and 9980 levels.
The Relative Strength Index—RSI on the Daily Chart is
62.5274 and it continues to remain neutral against the price showing no
divergences on either side. The Daily MACD still remains bullish but it has
started to contract its trajectory. On the Candles, a Candle with a long lower
shadow closely resembling a hanging man has occurred. This is a signal that the
current up move may get interrupted for immediate short term and such
formations also sometime marks a temporary top for the Markets.
All and all, Markets are throwing up certain signs that we
cannot ignore. After failing to comprehensively move past the 10130-10150 mark,
the lead indicators seem to be losing momentum. Further, the shrinkage of
futures premium coming with reduction in Open Interest also point towards minor
unwinding at higher levels. As of today, the Markets have marked a range of
9995-10180 for itself in the near term. In absence of any significant triggers,
we can fairly expect the Markets to continue trading in this broad range. We
recommend maintaining cautious stock specific approach is advised for the day.
Milan Vaishnav, CMT, MSTA
Technical Analyst
(Research Analyst, SEBI Reg. No. INH000003341)
Member:
CMT Association (Formerly known as Market
Technicians Association, (MTA), USA
Canadian Society of Technical Analysts, (CSTA),
CANADA
Society of Technical Analysts (STA),
UK
+91- 70164-32277 / +91-98250-16331
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