The domestic stock market remained rangebound despite making a buoyant start to the session on Monday. NSE Nifty lost over over 90 points from the day’s high to end flat with a marginal gain of 6.10 points at 11,053.90.

Nifty continued to trade in a defined range and stayed vulnerable to selloffs at higher levels. The zone between 20-DMA at 11,106 and 200-DMA at 11,183 remained a stiff resistance zone. The headline index is not expected to move past this zone anytime soon.

Tuesday’s session is likely to see a tepid start with 11,100 and 11,165 levels acting as resistance. Supports may come in at 11,000 and 10,945.

The Relative Strength Index (RSI) stood at the 42.52 level and marked a fresh 14-period high, which is bullish. The indicator also showed a bullish divergence against the price. The daily MACD stayed bullish and traded above its signal line.

The pattern analysis showed that Nifty completed the rounding-top formation and breached its neckline on the downside. After forming a low near 10,780, it staged a technical pullback. The pullback halted exactly near the neck-line area, which the index took out on its way down. The 20-DMA and 200-DMA levels also remain very close to this zone.

Nifty has created a wide trading area with resistance coming in the 11,100-11,180 zone and support at 10,780. Unless the upper range is taken out, the index is not likely to make any major sustainable directional move.

Unless the 200-DMA is taken out, the index will continue to remain vulnerable at higher levels.

We recommend traders to stay highly stock-specific and maintain a careful approach at higher levels.

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