Where are we: Whenever an index/stock struggles to break through a well-defined line. The underlying trend of Nifty continues to be range-bound and the key overhead resistance of 12350-12400 is unlikely to be broken before the index shows any meaningful downward correction, said technical analysts. Jubilant Foodworks, Wipro, ICICI Bank, Maruti & Tata Motors are some of the top short-term picks.
What is in store: Last week’s action marks the return of volatility as India VIX rallied by 20 per cent. Momentum of the index tapered off after leadership sector BankNifty broke below the support of its rising trendline. Our customised breadth indicator has been moving lower since the last week of December, which hints at a decelerating momentum due to indecisiveness on top. Despite Thursday’s strong up-move along with large bullish candle; in Friday’s session, BankNifty trended lower through the session. Momentum on the downside picked up as it sustained below 32,100 mark. Going ahead, sustenance below 32,000 could attract weakness from near-term perspective.
What could investors do: Momentum slowdown in Nifty Private Bank index, failing to sustain above midpoint of four-digit gann number of 1765(0) has not allowed index biggies to endure at the top. With index leadership sector showing signs of topping out, Nifty may enter a grinding phase of high whipsaw moves.
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