The domestic equity market continued with its winning streak on Friday, as the benchmark Nifty inched up further and ended the day with a net gain of 21.95 points, or 0.21 per cent. Despite the market ending with modest gains, it started showing signs of consolidation. Few signs of some fatigue were also evident and there are strong chances that the market may take some breather for a while before it continues with the upward move again.

The air strikes on Syria carried out jointly by US, UK and France are also likely to infuse some volatility in global trade as well. However, these jitters may be shortlived, but in any case, the present structure of the charts points towards rangebound consolidation.

On Monday, the Nifty50 is likely to see the 10,535 and 10,560 levels act as immediate resistance. Supports should come in at 10,430 and 10,410 levels.

The Relative Strength Index or RSI on the daily chart stood at 59.4349 and it has continued to mark yet another 14-period high, which is a bullish signal. The RSI remains neutral to the price, showing no divergence. The daily MACD stays bullish even as it trades above the signal line. No significant formations were observed on the candles.

Pattern analysis showed some indicators are a little overstretched. They do not hold any potential to trigger significant downsides in the markets. However, they certainly can push the market into consolidation in the immediate short-term.

Overall, there are some chances of global trade triggering some volatility, but in any case, consolidation is what is expected and no major downsides are seen. Whatever volatility we may witness is expected to remain rangebound. We advise investors to keep overall exposure moderate at higher levels and protect profits vigilantly.

Downsides, if any, will present opportunity to make quality purchases once again.

STOCKS TO WATCH:

Long positions were seen being added in Nalco, RCom, HCC, Ashok Leyland, IDFC Bank, Tech Mahindra, Sail, Hindalco, KPIT, Coal India, NTPC, Escorts and Federal Bank.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)