Trade setup: Most prudent way to navigate market is to stay highly stock-specific

In a weak buying and selling session, Indian equities gave up few essential helps because it opened weak and ended the day with a loss. Whereas inheriting the weak world commerce setup of the weekend, Nifty opened with a tepid word.

Following a destructive begin to the day, Nifty opened under the essential helps and traded with a bearish undertone all through the day. It examined the low level of the day when it slipped under the psychological stage of 16,900. Some modest restoration adopted that took Nifty a bit increased. The index lastly ended with a internet lack of 218 factors (-1.27%).

From the technical perspective, what has been damaging for the markets is the violation of the 200-DMA on a closing foundation. The 200-DMA presently is at 17,199. Nifty has dragged its resistance ranges decrease. This level will now act as a robust resistance on a closing foundation.

Going by the choices knowledge as effectively, the strikes of 17,000 and 17,200 witnessed giant Name writing. The extent of 17,200 holds the very best Name OI. This makes this stage a formidable resistance from the derivatives knowledge standpoint as effectively.

Volatility spiked. IndiaVIX surged 15.83 per cent to 21.2575. Nifty will try to discover some stability by trying a technical pullback. The degrees of 17,000 and 17,145 will act as quick resistance factors. The helps will are available in at 16,880 and 16,805 ranges.

The each day RSI is 42.89. It reveals a bullish divergence towards the worth. Whereas the worth made a brand new 14-period low, the RSI didn’t, and this resulted in a bullish divergence. The each day MACD is bearish and stays under the sign line.

A falling window emerged on the candles. This outcomes out of a niche down, and normally resolves within the course of the development. Nevertheless, this can want affirmation on the following bar.

The markets have violated the essential 200-DMA. Nevertheless, this may not imply a outright begin of the downtrend. Nifty has simply dragged its resistance ranges decrease within the occasion of any technical pullback. In any other case, the zone of 16,825-16,900 can be a essential sample assist zone for the markets.

The markets have additionally seen addition of brief positions over the previous days because the decline has include a rise in OI. So, within the given situation, essentially the most prudent method to navigate the markets can be by staying extremely stock-specific and selective in strategy whereas avoiding excessively leveraged positions.


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