The benchmark Nifty50 had a volatile session on the expiry of the September series, as it oscillated in a 70-point range and finally showed technical pullback in the second half of the session. It ended the day gaining 33.20 points or 0.34 per cent.

Two points that can be called important happened in the Thursday’s session. First, the Nifty managed to hang on to the 100-DMA support at close levels, which stand at 9,773; and second, in all probability, it has formed a large trading channel that is marked with red line on the charts while re-establishing the levels of 9,685 as its immediate all important support.

Friday is expected to see a modestly positive start. In all likelihood, no major downsides are expected. On the other hand, no runaway rise may occur as well as we head into the extended weekend with Monday being a trading holiday.



Friday will see the levels of 9,825 and 9,860 playing out as immediate resistance levels for the markets. Supports come in at 9,730 and 9,680 zones.

The relative strength index – RSI on the daily chart is 36.7169, and it stays neutral showing no divergences against the price. Daily MACD stays bearish trading below its signal line. No significant formations were observed on candles.

The pattern analysis shows that the Nifty took a support at its previous lows of 9,685 and rose nearly 90-odd points from there.

It has re-established the supports of 9,685 and has also created a broad rectangle trading channel until it is broken.

Overall, we still maintain a cautious view on the markets. In all probability, the Nifty may continue with its attempt to a technical pullback, it is likely to resist to the rising trend line – the channel – that I broke on the downsides.

Unless there are specific negative news flows, no major downside is expected as well. All and all, we expect a session in a defined trading range and select outperformance in stocks will continue. While avoiding shorts, select buying can be done from lower levels.

STOCKS TO WATCH | We are likely to see stocks like Godrej Industries, GAIL, Sun Pharma, Hero MotoCorp, CEAT, DHFL, Marico and Maruti trading with positive bias.

(Milan Vaishnav, CMT, MSTA, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. Contentions made in this article are mere observations. Investors should consult their financial advisers before taking any positions based on these remarks. Views expressed are the author’s own do not represent those of ETMarkets.com. The author can be reached at milan.vaishnav@equityresearch.asia)