Trade setup: Nifty may see intermittent pullbacks, but market vulnerable to profit taking
NEW DELHI: Fridays trade remained somewhat of consolidating nature as Nifty remained sideways for the entire session before ending with modest gains.
After a flat start and a dip soon after that, the index recovered from its immediate support area in the 11,740-11,760 zone.
The index pulled back from these levels and then traded sideways in a capped range and ended the day with a gain of 26.90 points (up 0.23 per cent).
Mondays start can be slightly positive in nature as Nifty has bounced back from its short-term support. However, the broader technical setup suggests no sustainable upmove for the market apart from mild technical pullbacks that we might witness.
There are higher probabilities that if Nifty opens on a positive note, it may lose strength going ahead. The opening of the market on Monday and the trajectory that it takes during the day will be critical to determine the trend for the session.
We expect Nifty to face resistance at 11,930 and 12,000 levels, while support should come in at 11,770 and 11,710 levels.
Relative Strength Index (RSI) on the daily chart stands at 55.7669; it remains neutral and does not show any divergence against price. The daily MACD remains bullish, but it appears to be narrowing its trajectory.
A Bullish Harami pattern has emerged on the candles. The present form of a Bullish Harami pattern is bearish in the current technical setup since this has formed during an uptrend. It potentially suggests the bears are gaining strengths as the bulls weaken.
Pattern analysis shows Nifty is getting a full throwback after attempting to break out from the 11,740-11,760 range. It appears the index has fallen off from rising and narrowing wedge that it had formed after marking lifetime highs.
As we approach Mondays trade,Read More – Source