Contrary to what was expected, the market on Tuesday witnessed a better-than-expected session, as the NSE benchmark Nifty saw a sharp rebound and recovered all of its previous days losses.
In a relatively stable session, the NIFTY ended the day gaining 79.35 points or 0.70 per cent. However, it remained in a broad range that it has defined for itself post marking highs of 11,495.
Market will open on Thursday after a trading holiday on account of Independence Day.
As we approach Thursdays session, we expect the markets to open on a quiet note. Also dont expect any significant broader move in the market, as the Nifty is expected to remain in a broad range that it has defined for itself.
Nifty continues to remain vulnerable to profit taking bouts at higher levels, and any consolidation that happens, which is in fact required, will make the market healthier.
Thursday will see the levels of 11,470 and 11,495 playing out as immediate resistance area. Supports may come in lower at 11,370 and 11,310 zones.
The Relative Strength Index (RSI) on the daily chart is 66.6763, and it remains neutral showing no divergence against the price. The daily MACD has reported a negative crossover, and it is now bearish while trading below its signal line. No notable formations were observed on the candles.
Pattern analysis shows the Nifty is consolidating in a broad range after marking immediate high at 11,495 after breaking out from the 11,175 level.
The market continues to remain in firm primary uptrend. However, post marking high of 11,495, the Nifty is likely to consolidate in a broad range.
Even if we see a modestly positive opening on Thursday and market inching higher in the initial trade, it would be all the more important to vigilantly protect profits at higher levels as the market continues to remain vulnerable to profit taking bouts at higher levels.
We recommend chasing momentum, but that should be done on selective basis while adopting vigilant and cautious approach at higher levels.
STOCKS TO WATCH: Long positions were seen being built in stocks of Sun Pharma, Reliance, Axis Bank, NCC, ICICI Bank, ITC, Tata Steel, Coal India, Ambuja Cements, KPIT, L&TFH and DHFL.
(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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