After opening flat and extending losses in the first half of the
session, the NIFTY saw a smart recovery from the low point of the day. It ended
the day flat with a minor loss of 1.10 points or 0.01% recovering nearly 58
points from the low point of the day. We enter the penultimate day of the
expiry of the current derivative series and we expect the session to remain dominated
with rollovers. A mildly positive start is expected and the NIFTY may try and
find base around these levels. However, an up move enough to move back into the
upward rising channel will be important to avoid any further weakness.
The levels of 9910 and 9960 will act as immediate resistance
levels while supports are expected to come in at 9820 and 9770 zones.
The Relative Strength Index – RSI on the Daily Chart is 41.2143.
It has marked a fresh 14-period low and this is Bearish. However, it does not
show any divergence against the price. The Daily MACD is bearish while trading
below its signal line. On Candles, a
Candle with a long lower shadow has emerged. It has a potential to halt the
current downtrend and we can expect the Markets to attempt and find some base.
Also, this Candle remains important as it has emerged when the Stochastic
indicator is oversold and the support of 100-DMA remain in close vicinity.
While having a look at pattern
analysis, the NIFTY has evidently marked a downward breach from the multi-month
upward rising channel that it has formed. Tuesday’s close is just outside the
Channel and it would be important for the Markets to crawl back into the
trading channel again.
Overall, we expect the volatility
to remain ingrained in Wednesday’s session. Also, attempt to find base by the
Markets makes the 100-DMA support more important. With no signs of any reversal
of trend, we expect the dips now being bought into once again. We recommend remaining
light on overall exposures and also avoid shorts due to presence of significant
short positions in the system. Cautious optimism is what is advised for
Wednesday.
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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