The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    Trade setup: No runaway rally till Nifty reclaims 12,000-12,050 zone

    Synopsis

    The 11,930 & 11,985 levels will act as resistance. Supports may come in at 11,840 & 11,750.

    Getty Images
    The Relative Strength Index (RSI) on the daily chart stood at 61.27 and stayed neutral, showing no divergence against the price.
    The domestic stock market had a listless and quiet session on Monday, as NSE Nifty saw a positive start to the day, but soon pared gains. After failing to capitalise on the positive opening, the index spent the rest of the day in an extremely narrow range, and ended with a minor loss of 10.95 points or 0.09 per cent at 11,884.50.

    There is no change in the technical setup. NSE Nifty was headed nowhere on Monday, and the 12,000-12,050 zone will continue to remain a stiff resistance zone. We don’t expect any runaway upmove to occur unless these levels are taken out comprehensively. Dalal Street may also witness periods of consolidation with rangebound corrections in the short term below this zone.

    Tuesday’s session is expected to see a subdued opening, and there is a possibility of some gains in the initial trade, but those might remain capped. The 11,930 and 11,985 levels will act as resistance, while supports may come in at 11,840 and 11,750.

    The Relative Strength Index (RSI) on the daily chart stood at 61.27 and stayed neutral, showing no divergence against the price.

    1ETMarkets.com

    The daily MACD stayed bearish while trading below its signal line. Apart from a black body that occurred on the candles, no other formations were observed.

    Pattern analysis of the daily chart suggests the market may take a breather. The 12,000-12,050 zone appears to be an immediate top for the market, and it can potentially obstruct any sustainable upmove from the current levels.

    All in all, the market appears to be in state of rangebound consolidation. Nifty must move past its overhead resistance, because the possibility of it testing short-term 20-DMA rises the longer it remains in the state of consolidation.

    We recommend traders to adopt a highly stock-specific approach for the next session until the market takes a directional bias. We also suggest to avoid aggressive positions on either side and protect profits.

    (Milan Vaishnav, CMT, MSTA, is a Consultant Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Also Read

    The Economic Times