Market outlook: Index to trade rangebound, volatile trade ahead
, ET CONTRIBUTORS|
Updated: Oct 23, 2017, 09.12 AM IST
In our previous notes, we had pointed out that due to certain factors the domestic market may not achieve a clean breakout and might return to the broader trading range that has developed over the past couple of weeks.
Such unfavourable technical factors weighed heavy on the market, which turned Thursday’s one-hour Muhurat trading session one of the worst in recent years.
The benchmark Nifty50, which otherwise never sees volatile movements on such occasions, went on to end with a net loss of 64.30 points, or 0.63 per cent, after some recovery from the low point of the day. Going into Monday’s session, we believe corrective undertone might persist. For the immediate foreseeable future, the 10,250 level will act as immediate major resistance area.
The 10,195 and 10,250 levels will act as immediate resistance for the market. Supports are likely to come in at 10,065 and 9,980 levels.
The Relative Strength Index or RSI on the daily chart stood at 59.1669 and it remained neutral showing no divergence against price. The daily MACD is bearish while trading below the signal line.
Pattern analysis showed it is very much evident that the market did not achieve a clean breakout while attempting to move past the 10,190 level. In all probability, since the Nifty50 has ended below these levels, it will return to this broad trading range.
With a high probability of the index returning to the broad trading range and not achieving a clear breakout, we might see volatility returning to the market soon. F&O rollover will dominate intraday trajectory of the trade in the coming week.
Nifty will continue to face resistance in the 10,200-10,250 zone in case of any upward move. Select sectora; outperformance will be seen. Overall, cautious view is advised for the day.
STOCKS TO WATCH:
Good trading setup is observed in stocks like Bombay Dying, Deepak Nitrate, Mahindra CIE, Orient Press, Torrent Power, Dena Bank and Jamna Auto.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
Such unfavourable technical factors weighed heavy on the market, which turned Thursday’s one-hour Muhurat trading session one of the worst in recent years.
The benchmark Nifty50, which otherwise never sees volatile movements on such occasions, went on to end with a net loss of 64.30 points, or 0.63 per cent, after some recovery from the low point of the day. Going into Monday’s session, we believe corrective undertone might persist. For the immediate foreseeable future, the 10,250 level will act as immediate major resistance area.
The 10,195 and 10,250 levels will act as immediate resistance for the market. Supports are likely to come in at 10,065 and 9,980 levels.
The Relative Strength Index or RSI on the daily chart stood at 59.1669 and it remained neutral showing no divergence against price. The daily MACD is bearish while trading below the signal line.
Pattern analysis showed it is very much evident that the market did not achieve a clean breakout while attempting to move past the 10,190 level. In all probability, since the Nifty50 has ended below these levels, it will return to this broad trading range.
With a high probability of the index returning to the broad trading range and not achieving a clear breakout, we might see volatility returning to the market soon. F&O rollover will dominate intraday trajectory of the trade in the coming week.
Nifty will continue to face resistance in the 10,200-10,250 zone in case of any upward move. Select sectora; outperformance will be seen. Overall, cautious view is advised for the day.
STOCKS TO WATCH:
Good trading setup is observed in stocks like Bombay Dying, Deepak Nitrate, Mahindra CIE, Orient Press, Torrent Power, Dena Bank and Jamna Auto.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)
