Headline index Nifty opened stable, improved as the day progressed and ended the day with a decent gain. After opening on a positive note, the index stayed in an upward rising trajectory throughout the session. Volatility remained absent and at no point in time did the market showed any intention to correct. Following a steady day, Nifty ended the day with a net gain of 168.05 points or 1.16 per cent.
Over the past couple of days, Indian equities are making up for their recent underperformance against their global peers. Nifty is now well above its 100-DMA at 14,407; it has confirmed this level as one of the important support points for the near term. On the higher side, the index now has resistance at 14,803 which remains an immediate resistance area. This zone also coincides with the falling trend line pattern resistance near 14,750. This makes 14,750-14,800 major resistance zone for the market.
ET CONTRIBUTORSVolatility declined as India VIX came off by 1.76 per cent to 23.0825. Wednesday’s session is likely to see the levels of 14,700 and 14,755 acting as resistance points, while support will come in at 14,600 and 14,530 levels.
The Relative Strength Index (RSI) on the daily chart stood neutral at 51.72 and did not show any divergence against price. The daily MACD was bearish and remained below its Signal Line. However, the narrowing Histogram suggests that if the present momentum is sustained, we may see a positive crossover on this indicator. A white body emerged on the candles. Apart from this, no other important formation was noticed.
The pattern analysis shows that Nifty was well inside the falling channel now; it has bounced off its 100-DMA and confirmed this point as the support. It is now again in the consolidation zone formed between 50-, and 100-DMA while staying inside the falling channel.
As we enter the penultimate day of the expiry of the current derivative series, the coming sessions will now stay dominated with rollovers and the texture of the market will continue being highly stock specific as it has been over the past several days. We recommend curtailing leveraged exposures as volatility may be seen over the next two sessions owing to expiry. A cautiously positive outlook is advised for the day.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
