Amid rangebound, but volatile trade on Thursday, the domestic equity market continued to correct, as NSE Nifty despite opening on a positive note ended with a loss of 0.39 per cent after the RBI policy outcome.
The index marked a classical top, as it tested previous high and saw retracement from that level.
With the 11,760 level getting confirmed an immediate top once again, there are higher chances that the market may continue to correct and all upmoves face profit taking bouts.
Fridays session may see a soft start and 11,660 and 11,710 levels act as immediate resistance points. Supports are likely to come in at 11,510 and 11,420.
The Relative Strength Index (RSI) on the daily chart stood at 65.12 and it remained neutral, showing no divergence against the price. The daily MACD remained bullish, but is likely to show a negative crossover in the coming sessions, as it sharply narrowed its trajectory.
Apart from a black candle, no significant formations were observed on the charts.
The pattern analysis showed that Nifty has marked a classical Double Top at the 11,761 level, as it saw sharp retracement after it tested its prior high of 11,760.
These two levels of the double top are nearly seven months apart, and this lends credibility to this formation and to the level of 11,760 as stiff resistance going ahead.
We expect a soft start on Friday as Nifty isn't likely to show any runaway upmove. The 11,760 level has reinforRead More – Source