The domestic stock market took a breather on Monday, as NSE Nifty snapped four-session winning streak on profit taking. The index made a soft start and soon slipped into a red. It made a sharp recovery at the fag-end of the day on short covering and finally ended with a marginal loss of 9.05 points or 0.07 per cent at 12,262.75.
The 12,300 level, which has the highest Call open interest builtup, will continue to act as strong resistance. This makes the 12,300-12,330 a stiff resistance zone, as indicated by pattern analysis and F&O data.
Nifty is broadening its formation while witnessing a loss in momentum and deteriorating market breadth. The action of the index against the price level of 12,300-12,330 will be critical to watch out for in the immediate short term.
Tuesday will be the penultimate session of the expiry of current derivative series, as Wednesday will be a trading holiday on account of Christmas.
The upcoming session is expected to see 12,300 and 12,330 levels act as strong resistance, while support may come in at 12,210 and 12,165.
The Relative Strength Index (RSI) on the daily chart stood at 66.63 and stayed neutral, showing no divergence against the price. The daily MACD was bullish and traded above its signal line. The white body emerged on the candles.
As per pattern analysis, Nifty is facing resistance at the 12300 level. Also, after the breakout above the 12,103, the index is witnessing loss of momentum at higher levels, which may keep any significant upmove under check.
All in all, analysis for Tuesday stays on similar lines. Nifty is vulnerable to profit taking at higher levels. There are elevated chances of the market continuing to remain under consolidation.
We would again advise traders to avoid aggressive purchases at any point and protect profit vigilantly at higher levels.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])
Source: Economic Times
