Fridays session remained rangebound wherein the Nifty50 headed nowhere and ended flat with negligible gains. After opening on a buoyant note, the market pared opening gains and spent the rest of the day trading in a capped range. The benchmark Nifty50 ended the day with a gain of 3.70 points, or 0.03 per cent.
As we step into a new week, we once again stare at a possibly rangebound session, wherein Nifty is not expected to make any major headway on the higher side and the previous high of 11,760 is likely to continue acting as a major hurdle.
Though strong GDP numbers that came out after market hours on Friday may provide an initial fillip to trade, but the previous high for the market will remain its immediate hurdle. The 11,760 and 11,795 levels will act as immediate technical resistance for Nifty, while supports will come in at 11,610 and 11,540 levels.
The Relative Strength Index, or RSI, on the daily chart stood at 69.5334 and it remained neutral, showing no divergence against price. The daily MACD stays bullish while trading above signal line, but it is flattening its trajectory. A spinning top is seen on the candles, which continue to portray an indecisive mindset among market participants.
Overall, the Nifty50 is still consolidating after it marked its previous immediate high of 11,760, which may act as a temporary top in the near term. For a meaningful upward move to occur once again, NIfty will have to move past this level with some significant gains.
However, in the present context, given the overextended nature of the market, we are likely to see Nifty spend some more time in a rangebound consolidation with limited downsides. We continue to recommend a cautious approach to the market. The session is likely to remain extremely stock-specific in nature.
Stocks to watch:
Relatively better technical setups were observed in IDBI Bank, Marksans Pharma, ONGC, BHEL, Tech Mahindra, Petronet, NTPC, Aurobindo Pharma, HPCL, L&T and Cipla.
(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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