Trade Setup: Nifty may make a technical pullback on Monday; stay away from high beta stocks

As India’s Covid graph continued to rise, the home fairness market additionally had a extreme sentimental hit on the final buying and selling day of the week on Friday.

Headline index Nifty opened on a unfavourable notice, however tried to get well within the first hour of the morning session. However, that restoration didn’t final lengthy because the market discovered itself gripped beneath a recent promoting strain as soon as once more. The index stayed range-bound for a while and within the second half, weak spot intensified. Nifty began to float decrease and went on to finish the day with a deep reduce of 263.80 factors or 1.77 per cent.

Nifty slipped beneath its 50-DMA at 14,782 as soon as once more. With the market ending at its low level within the earlier session, we may discover some preliminary weak spot within the commerce on Monday. The zone of 14,450-14,500 held itself as an essential help zone. While 14,459 was the 100-DMA from the place the index bounced off a few instances, and 14,500 held most Call OI; nevertheless, this may see a shift if weak spot persists. Nifty PCR throughout all expiries stood at 1.07, which made the market evenly positioned.


Monday’s session is prone to have a tepid begin to the day. The ranges of 14,680 and 14,735 will act as fast resistance factors, whereas help will are available at 14,550 and 14,480 ranges.

The Relative Strength Index (RSI) on the every day chart stood impartial at 49.63 and didn’t present any divergence in opposition to value. The every day MACD was nonetheless bullish, and remained above its Signal Line. A black physique occurred on the charts; aside from which no different essential formations have been seen.

The sample evaluation exhibits that the index was very a lot inside the falling channel shaped after marking the high level at 15,431. Nifty is as soon as once more between its 50-, and 100-DMA at 14,782 and 14,459, respectively.

There are possibilities that after a weak anticipated begin, there may be some technical pullback out there. However, the technical construction and the sentiment, each stay weak. Even if there’s a pullback, we reiterate staying away from high beta stocks whereas preferring defensive stocks. Adopt a cautious and stock-specific method for the day.

(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founding father of Gemstone Equity Research & Advisory Services, Vadodara. He will be reached at [email protected])

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