The domestic stock market continued with its upmove on Monday and gained 0.40 per cent, even as India VIX jumped 1.86 per cent to hit multi-year highs.
Volatility index or VIX rising sharply along with the stocks do not paint a good picture for the market.
Whenever volatility subsides after the kind of upmoves we are presently witnessing, it tends to adversely impact the market, especially when it is trading at higher levels.
Nifty is once again likely to see a muted start to the trade on Tuesday. Market may keep making incremental highs, but runaway rally will continue to elude until the level of 11,760 is comprehensively taken out.
However, the present structure on the charts do not favor chasing such incremental upmoves, as they typically tend to get unhealthy.
Tuesdays session will see 11,730 and 11,765 levels act as immediate resistance points. Supports may come in lower at 11,610 and 11,530.
The Relative Strength Index (RSI) on the daily chart stood at 64.3001. When analysed on a 14-day period, it continues to show bearish divergence against the price.
The daily MACD stayed bearish and traded below its signal line. No important formations were seen on the candles.
The pattern analysis of the daily charts showed that Nifty has marked a double top at the 11,761 level. The index halted by forming a large engulfing bearish candle. After that, though it has not shown any major corrective moves, it is seen consolidating in a range with a negative bias.
Over the past many occasions, Nifty has pulled back on short coverinRead More – Source
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