Markets have crossed the critical resistance level of 16,000 and have significantly crossed the 16,200 level Throughout the session, the markets continued to mark increasing heights – never showing a tendency to correct it. The market width was strong and the benchmark Nifty rose 50 456.75 points (+ 2.89%) to close at a strong note.
U.S. markets initially started weak but returned towards the end and closed flat. This could help in stabilizing the domestic market. The monthly derivatives will expire next week – from now on the sessions will be affected by the term-centric measures.
With the Nifty moving well above the 16,000 level, support levels have risen. Maintaining 16,000 levels to ensure a base and continue to drive up the upside will be crucial for the index. This action will continue to be highly stock-specific in nature moving forward from here.
Monday’s start is likely to be stable. Levels 16,300 and 16,430 will act as immediate resistance points. Support will come at 16,180 and 16,105 levels.
The Relative Strength Index (RSI) on the daily chart is 44.36 RSI is neutral and shows no difference in price contrast. However, it is a high high that is seen to come out of a small pattern formation after creating a bullish. The MACD is still bearish and below the signal line; However, the narrow histogram indicates a possible positive crossover in the coming days.
A rising window popped up above the candle. This is the result of a gap in the opposite. Such structures usually resolve towards the trend. Since this type of formation occurs near a strong pattern support zone, it is more likely to occur so that pullbacks continue.
Overall, if there is no global weakness in the domestic market, the upward trend is more likely.
However, that being said, the action in the market is equally likely to be highly stock specific in nature.
It is recommended that exposures must focus more on relatively strong pockets such as consumption, FMCG, PSE stocks, etc., and profits must be secured at a high level.
A cautiously positive approach is advised for the day.
(Milan Vaishnav, CMT, MSTA, a consulting technical analyst and founder of EquityResearch.asia and ChartWizard.ae (ChartWizard, FZE) and based in Vadodara. He can be contacted at [email protected])