Nifty continued to consolidate for the second day in a row on Tuesday, as it oscillated in a capped range before ending the session flat. After opening on a positive note and maintaining modest gains for the most part of the session, the index slipped into the red and spent the last hour and a half trading around the previous close. Nifty finally settled flat, posting a negligible gain of 6 points or 0.06 per cent.
Stock exchanges will hold one-hour Mahurat Trading on Wednesday on the occasion of Diwali. Such sessions obviously see lower volumes and tend to be rangebound. In any case, the 10,600-10,650 levels should continue to pose resistance to Nifty at higher levels.
With Wednesdays one-hour session discounted and Thursday being a trading holiday, there is only one full trading day left this week. Given this set-up, the market is likely to continue rangebound trade and move with caution with no major directional bias.
A cursory glance on the technical charts shows RSI stood at 50.5099 on the daily chart and remained neutral showing no divergence from price. The daily MACD remained bullish as it traded above the signal line. No major formations were observed on the candles.
Broadly speaking, Nifty has formed a broad trading range for itself and given the lower tops and bottoms that it has formed in the last few months, the 10,600-10,700 zone should remain an important resistance that Nifty will have to deal with.
We expect a stable start to the short Mahurat Session and rangebound trade with token purchases on select counters.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])
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