Nifty moved in a capped 100-point range this session. Volatility index India VIX declined marginally by 0.43% to 38.0775. The Finance Minister’s second round of stimulus has failed to enthuse the market, as it is perceived the doleouts be a largely good long-term measure without any hope of addressing the problems troubling the economy in the near term. In any case, few pullbacks can be expected, but they will remain capped at higher levels.
Nifty is likely to see a tentative start to the week on Monday. The 9,190 and 9,245 levels will act as key resistance, while supports will come in at 9,050 and 9,000 levels. The Relative Strength Index, or RSI, on the daily chart stood at 47.13. It remains neutral and shows no divergence against price. The daily MACD remains bullish, as it trades mildly above the signal line. A small Hammer-like candle has appeared on the charts. This is not a Classic Hammer as the lower shadow is as long as required. In any case, it is unlikely to have any significant impact under the current technical setup.
Pattern analysis shows a highly fragile technical structure. Nifty has fallen out of the Rising Wedge formation and remains below its 50-DMA. The 50-DMA, which currently stand at 9,292, is likely to act as a formidable resistance on a closing basis in the event of any technical pullback.
ET CONTRIBUTORS
All in all, the market remains in a no-trade area, more so when it is not exhibiting a convinced directional bias. The technical setup remains weak. And the market will continue to show a negative bias.
All pullbacks, if any, will face selling pressure at higher levels. We reiterate refraining from taking aggressive long positions or making any attempt to chase a technical pullback or making purchases at lower levels.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])
