The equity market got off to a better start on Monday, showing resilience along with the Asian peers despite weak overnight closing of US Markets.
In a rangebound session, the Nifty remained relatively steady, and ended up rising 47.75 points or 0.47 per cent.
We expect this upmove to continue on Tuesday. However, market is showing some signs of impending consolidation, but despite such intermittent mild consolidation moves, the Nifty is all likely to advance towards its 100-DMA and 50-DMA zones, which remain in close vicinity of each other.
Tuesday will see the levels of 10,430 and 10,450 will play out as immediate resistance area for the market. Supports will come in at 10,330 and 10,275 zones.
The RSI on the daily chart is 54.7432, and it has once again marked a fresh 14-period high, which is bullish. RSI stays neutral showing no divergence against the price. The daily MACD is bullish, while it trades above the signal line. Apart from a white body that was formed on candles, no significant pattern was observed.
If we analyse the overall structure of the charts, the market is comfortably placed in a 27-month long upward rising channel on weekly charts. On daily charts, it has broken out from a small falling channel, which it had created since the beginning of 2018.
Overall, though chances of some consolidation, sooner or later, cannot be ruled out, we expect the Nifty to continue with its advancement.
We expect this upside to continue, and will see market taking breather between 10,430 and 10,450, where the 100-DMA and 50-DMA converge. We expect some consolidation happening there. Until this happens, with each move that result into consolidation or a mild corrective wave, these opportunities should be utilised to make select purchases.
The underlying structures of the market remains stable.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])