Nifty: Trade Setup: Nifty likely to take a breather till it moves past the 17,950 level

Tuesday’s session turned out to be fairly uneven. Nifty50 not solely confronted resistance on the ranges we had talked about on this column yesterday, but additionally noticed some corrective exercise. The market noticed a optimistic begin to the day, and Nifty50 marked its intraday excessive within the opening seconds of the session.

It quickly pared the positive factors and traded flat close to the earlier shut. Then selloff gripped the market after that and that not solely pushed Nifty into the adverse territory, however made it weaker as effectively. The index slipped beneath the 17,600 mark. Nonetheless, the final hour of the session noticed Nifty rebound over 160-odd factors from the lows. It lastly ended with a internet lack of 106 factors, or 0.60 per cent.

From the technical perspective, Tuesday’s session quickly marked an intermediate high for the market within the 17,900-17,950 zone. For a contemporary bounce to happen, Nifty must transfer previous the 17,950 stage convincingly. Till this occurs, we are going to see the market, consolidating in a broad however outlined vary. Volatility continued to edge larger; India VIX rose by 2.67 per cent to 18.5350 stage.

Wednesday’s session not solely marks the penultimate day of September F&O sequence, but additionally the month-to-month by-product expiry. The market will keep influenced with rollover-centric actions over the following two classes.

On Wednesday, the 17,800 and 17,845 ranges act as key resistance factors for Nifty, whereas helps ought to are available at 17,700 and 17,630 ranges. The Relative Energy Index (RSI) on the each day chart stood on the 70.98 stage; it stays impartial and doesn’t present any divergence towards the value.

The each day MACD has once more reported a adverse crossover; it’s now bearish and beneath the Sign Line. A candle with a protracted decrease shadow has emerged. The prevalence of such a candle close to the excessive level might quickly stall the bounce. Nonetheless, this may also want the affirmation on the subsequent buying and selling bar.

With the market displaying first indicators of taking some breather and consolidating at larger ranges, the 17,900-17,950 zone turns into an intermediate high and most vital resistance zone. Except this zone is taken out, no runaway rally may be anticipated for Nifty. We’ll see the broader market attempt to comparatively outperform the frontline indices.

Nonetheless, the feel of the market will get extra stock-specific than it ever was. We will count on some sector-specific reveals as effectively with sectoral indices for banking, PSUs, auto, and so on. placing up a resilient present.

(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founding father of EquityResearch.asia and ChartWizard.ae and is predicated at Vadodara. He may be reached at milan.vaishnav@equityresearch.asia)