The session on Friday remained much rangebound wherein the Nifty oscillated in the 40-point range. It remained in much capped range and gave up some of its gains in the last hour of the trade. The index settled the Fridays day with modest gains of 22.90 points or 0.21 per cent.
The significant behavior of the markets throughout the previous week was resilience towards few pockets of global weakness. Another important factor to take note of was the attempts of the Nifty to move past the all critical 10,800-10,850 zones.
As we approach fresh week beginning Monday, we expect a flat to modestly positive start to the trade. The Nifty has ended just below the falling trend line pattern area resistance and the opening levels and the intraday trajectory that the markets form after opening will be very crucial to watch for.
Monday will see the levels of 10,800 and 10,850 posing stiff resistance on the upside. Supports come in at 10750 and 10710 zones.
The Relative Strength Index – RSI on the Daily Chart is 53.7656 and it remains neutral showing no divergence against the price. The Daily MACD still remain bearish while trading below its signal line. No significant formation was observed on Candles.
On the pattern analysis front, the Nifty has almost failed the downward breach that it saw from a large symmetrical triangle formation. It has shown a sharp pullback inside the formation. Presently it resists once again to the falling trend line that initiates itself form the high of 11,170 and joins the subsequent lower tops.
Overall, the set remains resilient as the Nifty currently trades above all its moving averages. It presently resists to the falling trend line pattern resistance and it would be important for the Nifty to move past and close above the 10,800-10,850 zones for a resumption of a meaningful upmove. The lead indicators remain within a pattern and are seen forming higher bottoms. Minor corrective moves, if any, should be used to make select purchases while continuing to protect profits at higher levels.
STOCKS TO WATCH: Resilient technical set up is observed in stocks like Reliance, Ashok Leyland, BEL, Hindalco, BHEL, BPCL, JSW Steel, DLF, RECLTD, L&TFH, and PFC.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])