Home Market Trade setup for Friday: Nifty may find some stability; make very select...

Trade setup for Friday: Nifty may find some stability; make very select purchases


Much on the expected lines, the Nifty continued to consolidate in a capped range on Thursday. Though the broader market continued to remain under pressure, the Nifty ended the day losing just 23.35 points or 0.21 per cent. Though no deep losses were seen in the broader markets too, all sector indices except FMCG and PSU bank ended the day with some amount of losses.

As we approach the Fridays trade, we can expect the market to find some stability and some technical pullback can be expected. The Nifty presently continues to remain in a capped range in a congestion zone that it has created for itself.

Friday is expected to see a quiet start and though some nominal downsides should not cause any surprise, the levels of 10,910 and 10,880 are expected to act as support to the market. Resistance can be expected to come in at 10,990 and 11,035 zones.

Market should be approached cautiously for the day.

The Relative Strength Index – RSI on the Daily Chart is 58.7381. Just like the previous days, this continues to remain neutral showing no divergence against the price. Daily MACD is bullish and it trades above its signal line. No significant formations were observed on Candles.

While having a look at pattern analysis, it appears that Nifty has presently created a congestion zone for itself. In the coming days as well, we are likely to see the Nifty oscillating in a capped range before it prepares for a further upmove.

Overall, we can expect the markets to find some stability in Fridays trade. However, no-confidence motion against government has further contributed to the already volatile environment in the market, though numbers suggest that no major problem for the government would arise.

But, with the market presently remaining structurally intact, we are left to just deal with the volatility that has remained ingrained in the market. We recommend making very select purchases while effectively tracking the leading and rotating sectors. Market should be approached cautiously for the day.

STOCKS TO WATCH: Fresh short positions were seen being built in stocks like Tata Steel, NCC, Ashok Leyland, ICICI Bank, HCC, Hindalco, Jindal Steel, PTC, Granules, BEL, Infosys, DLF and Federal Bank.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])

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