Nifty likely to face resistance at 18134-210 zone
The hourly chart formed 2 lower high candles, also signifying the market is hesitant to move higher as the buying support is not enough
The domestic equity market closed higher on the lowest volume in recent time. The NSE Nifty closed at 18055.75 with 52.45 points or a 0.29 per cent gain. The Nifty Energy and IT indices are the top gainers with 1.23 per cent and 1.03 per cent. The Realty index is up by 0.57 per cent. The Metal index is the top loser with a 1.90 per cent decline. The market breadth is slightly negative as 1067 declines and 1003 advances. About 210 stocks hit their new 52-week high, and 239 stocks traded in the upper circuit.
The Nifty further inched up by quarter a per cent, but lost the strong bullish momentum. The breadth is not positive in the broader market and benchmark indices. The broader market index Nifty-500 has a negative breadth with 273 declines and 222 advances. Even the Midcap and Smallcap indices also have a negative breadth. This shows the current up move is at a mature stage. Tomorrow the Infosys is announcing the Q3 financial results, and the market is waiting for an earnings season.
Technically, the Average True Range (ATR) has declined. The lowest volume was recorded in the recent past. On 0.29 per cent gain, the Open Interest declined by 1.37 per cent and it's showing long unwinding in the market. The hourly chart formed two lower high candles, also signifying the market is hesitant to move higher as the buying support is not enough. As stated on Monday, the negative divergence in RSI shows its impact on the movement. It formed a lower swing. The Elder impulse system shows that the Nifty has entered a neutral zone again. The Nifty may face stiff resistance at the 18134-210 zone. Barring IT, the other sectoral indices failed to sustain the momentum and closed flat. The Nifty may face a litmus test for its uptrend because of its lack of broader market participation. The support moved further high to the 17965-896 zone. Below this zone, it may decline to below 17700, initially. Trade cautiously and wait for a decisive trending move on either side.
(The author is financial journalist, technical analyst, family fund manager)
