Home Market Trade setup: Nifty50 needs to move past 100-DMA at 10,904 level

Trade setup: Nifty50 needs to move past 100-DMA at 10,904 level


It was an action-packed start to New Year as the NSE benchmark Nifty rebounded over 120 points from the days to end with a modest gain on Tuesday. The market opened lower and traded sideways for most part of the session, showing no attempts for a recovery. However, the last hour saw the index surging sharply with the benchmark ending with a gain of 47.55 points or 0.44 per cent.

Despite the rise, the Nifty has halted once again at its 100-DMA, which is presently at 10,904. This level, theoretically speaking, still exist as a potential resistance mark for the market.

The Wednesdays session is likely to see a positive opening to the trade, and we expect the index to extend its upmove, at least in the initial session. With nearly all global markets shut, we have no global cues to look forward to in the morning.

Next session is likely to see the levels of 10,965 and 11,035 acting as resistance area. Supports may come in at 10,850 and 10,790 zones.

The Relative Strength Index (RSI) on the daily charts stood at 57.6162 and it continued to remain neutral against the price. The daily MACD has turned bullish after reporting a positive crossover. It now traded above its signal line. No significant formations were observed on the Candles.

Pattern analysis on the daily charts showed that Nifty continued to resist at its 100-DMA and this level remains an important resistance on closing basis. Though it has moved past the falling trend line pattern resistance, but is yet to clear the important resistance zone of 10,900-109,50 area.

Overall, despite a sharp surge that was witnessed in the previous session, it is yet to move past the 100-DMA level, which is at 10,904.

On technical terms, with the market ending near the high point of the day, expect a positive start and extension of the pullback.

However, it will be important for the Nifty to move past the 100-DMA with conviction on closing basis. The F&O data continues to suggest undercurrent remaining buoyant. Positive outlook is advised for the day.

(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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