Trade setup: Nifty may see a mild pullback, but outlook is still weak
The domestic stock market traded weak on Friday ahead of imposition of retaliatory duties on the US goods, as NSE Nifty ended with a loss of 90.75 points 0.76 per cent.
We expect a soft start to the week on Monday. Though mild technical pullbacks cannot be ruled out, Nifty may face selling at higher levels.
While negotiating soft pullbacks, the index has set a stage where it is likely to complete its throwback by testing supports that lie in the 10,740-10,760 zone.
Mondays session is likely to see 10,860 and 10,930 levels act as resistance. Supports are expected to come in at 10,770 and 10,740.
The Relative Strength Index (RSI) on the daily chart stood at 51.8733 and it has marked a fresh 14-period low, which is bearish.
The daily MACD stayed bearish while trading below its signal line. A black body emerged on the candles. No other formations were observed.
The pattern analysis of the daily charts showed that Nifty has slipped and closed below its short term 20-DMA, which is at 10,856.
This level may offer some mild resistance in event of Nifty attempting a pullback. If the index manages to stay above this level, we may see the market trading in a sideways trajectory.
All in all, the inherent bias of the market remained that of corrective nature. The leading indicators are making loRead More – Source