A few things were important from the technical perspective in Thursday’s session. Primarily, it’s a good sign that Nifty50 respected its immediate support zone of 17350-17400 levels. So long as the index stays above this zone, it will not witness any serious drawdowns from the current levels. Weakness will creep in only if this zone is violated. Furthermore, although the bulk of Nifty50’s gains came from Reliance, the preference towards traditionally defensive picks was visible as well. Only the market breadth remained slightly weak; it would be important to see if this point gets corrected going ahead from here.
Friday is likely to see a stable start to the day. With US markets closed due to Thanksgiving Holiday, there will be no overnight cues to deal with. The levels 17590 and 17685 will act as resistance points. The supports come in at 17480 and 17410 levels.
The Relative Strength Index (RSI) on the daily chart is at 41.27; it is neutral and does not show any divergence against the price. The daily MACD is bearish and stays below the signal line.
ETMarkets.comNifty50 has largely respected the pattern support area of 17350-17400; it would be important for the markets to keep their head above this level to avoid any incremental weakness.
For Friday and onwards, market breadth will be something that the market participants will have to keenly watch. A stronger market breadth will be a prerequisite if Nifty50 has to find an end to this intermediate weakness and reverse from here. The texture of the markets will stay a little defensive; the pockets like consumption, select midcaps, auto, pharma, and IT are likely to see their relative strength improving against the broader markets. Cautious optimism is advised for the day.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of EquityResearch.asia and ChartWizard.ae (ChartWizard, FZE) and is based at Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
