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Trade Setup: 15,200-15,250 strong resistance zone for Nifty; be stock-specific

Regardless of all of the conducive surroundings and setup, the home fairness market didn’t capitalize on the optimistic opening that it received on Friday and ended the day on a unfavorable be aware.

Headline index Nifty received a gap-up opening however fashioned its intraday excessive in early minutes of the commerce. After spending the morning commerce inside an outlined vary, the index step by step gave up all its achieve and slipped into the unfavorable zone. Promoting strain intensified within the afternoon and Nifty slipped additional deep into the unfavorable. At one time limit, Nifty got here off over 350 factors from its highest stage. Following some restoration from the lows, the index ended with a internet lack of 143.85 factors or 0.95 per cent.

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From a technical perspective, Nifty has saved the short-term falling development line drawn from its highest level nonetheless legitimate. Which means except it strikes previous 15,200-15,250 zone once more, it can keep weak to revenue taking bouts. Within the earlier session, as indicated by F&O information, Nifty March futures added over 2.91 lakh shares, or 2.60 per cent, in Open Curiosity, indicating creation and addition of contemporary shorts to the system. NIFTY PCR throughout all expiries stood at 1.02, which continued to put the market at a good footing. This may occasionally trigger some optimistic opening on Monday as some delicate technical pullback can’t be dominated out within the preliminary commerce.

Monday’s session might have a modestly optimistic begin to the day with 15,065 and 15,130 performing as instant resistance factors for Nifty, whereas assist will are available in at 14,980 and 14,910 ranges.

The Relative Energy Index (RSI) on the day by day chart stood impartial at 53.46 and didn’t present any divergence in opposition to worth. The indicator remained in a impartial symmetrical triangle formation; any decision to this sample will give advance cues of the directional bias the index might take over the approaching days. The day by day MACD remained bearish and traded beneath its Sign Line. An engulfing bearish sample was seen on the candles; given its incidence close to the excessive level, it reinforces the zone of 15,200-15,250 as a robust resistance zone at greater ranges for the index.

The market stays trapped in a broad consolidation zone; will probably be some time earlier than it takes a transparent and sustained directional bias on both aspect. We’ll see any dips getting purchased into even when it is just on the premise of quick overlaying. In the identical breadth, all bounces will face revenue taking bouts except Nifty decisively strikes previous the 15,200-15,250 zone. We reiterate that the necessity of the hour is to proceed staying stock-specific and defend earnings with strikes on the both aspect. A cautious strategy is suggested for the day.

(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founding father of Gemstone Fairness Analysis & Advisory Companies, Vadodara. He might be reached at milan.vaishnav@equityresearch.asia)

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