Indian Equity Markets had a disappointing session once again as
the benchmark NIFTY50 continued its decline and ended with net loss of 91.80
points or 0.92%. Monday’s corrective move has been of a technical nature and if
some critical levels are not maintained, we may see weakness persisting in the
Markets. These corrective activities remain significant given the present
texture of the Markets. We expect a quiet start to the Markets on Tuesday but the 100-DMA of 9758 will be critically
important not just for the immediate short term but for medium term as well.
Any violation will mean disruption in the primary uptrend and the zones of
10150-10170 will be marked as immediate top for the Markets.
Tuesday will see levels of 9910 and
9965 will play out as immediate resistance levels for the Markets. Supports
come in lower at 9810 and 9750 levels.
The Relative Strength Index – RSI on
the Daily Chart is 41.2840 and it has marked a fresh 14-period low which is
bearish. It does not show any divergence against the price. The Daily MACD has
reported a negative crossover and it is now bearish while trading below its
signal line. Occurrence of a big black body on candles reaffirms credibility of
50-DMA as the immediate resistance levels for the Markets.
The pattern analysis saw an
important development today. It shows that any dip below the 9850 mark will
imply a downward breach of NIFTY from the 6-month long upward rising channel
that it has been trading in. It would be extremely important for the Markets to
crawl back into this channel to remain in a trading range.
Any continuing breach of current
Market levels will increase the chances of the benchmark testing its 100-DMA.
In all likelihood, the NIFTY has transformed itself in a broad trading band and
as of now no significant signs of a reversal of trend are seen. With the
primary trend still very much in place, we recommend reducing the overall
exposures and wait for the Markets to stabilize following which select
purchases can be made.
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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