The Indian equity market saw rollovers and expiry infused volatility and ended the day with a modest loss of 12.85 points or 0.12 per cent.
The benchmark Nifty50 pared all of its gains in the last 45-minutes of trade and ended near the low point. Though there was volatility in the market, it was rangebound volatility.
The more important fact, which is technically important is that the Nifty has once again slipped below the 10,490-mark, and the earlier breakout attempt has subsequently failed because of lack of confirmation.
Going into trade on Friday, we can still expect the market to show a quiet opening and try to move past the 10,490 levels again. The levels of 10,490 and 10,535 will act as resistance, while supports come in lower at 10,410 and 10,350 zones.
The Relative Strength Index (RSI) on the daily chart is 60.5969 and it stays neutral showing no divergence against the price. The daily MACD still remain bullish while trading above its signal line.
A black body has emerged on the candles, but it remains insignificant in the present formation. The pattern analysis shows that the previous attempt of the Nifty to break above the 10,490-mark has failed given the lack of confirmation.
Now, it would require to break out above this level afresh and until this happens, the zones of 10,490-10,535 has become a formidable resistance for the Nifty.
Overall, if we discount the Thursday's volatility to be expiry-driven, it would be necessary to see that the Nifty makes fresh attempts to move past the 10,490-mark.
No sustainable upmove shall occur until the Nifty moves past this critical resistance zone. We reiterate our cautious view on the market until this occurs.
Stock specific outperformance will occur. Highly stock specific and cautious view is advised for the day.
STOCKS TO WATCH: Fresh shorts were evident on counters like Suzlon, South Indian Bank, Federal Bank, Tata Motors, PFC, HCC and State Bank of India. Long positions were added on counters like Adani Power, TV 18 Broadcast, Tata Power, Vedanta, Jain Irrigation, NHPC and Jindal Steel.
(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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