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The Nifty may find its first support at 5,295
While the Nifty has been holding around the 5,400 mark, the bulls were unable to make any headway even though they have been in control. One will have to wait for the market to decide its immediate future course
S&P Nifty close: 5,386.70
Short Term: Up Medium Term: Down Long Term: Down
The bulls succeeded in pushing the Nifty steadily higher through most of the week before easing off a bit at the end. The Nifty finally closed 20 points (+0.38%) in the green but failed to close decisively above trendline resistance shown in black. The volumes were marginally lower than last week implying that the even though the bulls are in control they have not been able to push the Nifty into the higher gear. The week ended at deuce on poor volumes as nor the bulls or bears failed to make any headway, leaving the future course of the market in suspended animation. However, the onus is on the bulls to push higher because they are the ones who have been in control.
The sectoral indices which outperformed were CNX IT (+3.18%), CNX MNC (+1.74%) and CNX PHARMA (+1.38%) while the underperformers were CNX REALTY (-2.20%), CNX INFRA (-1.86%), CNX MEDIA (-1.74%), CNX ENERGY (-1.32%) and CNX PSU BANK (-1.04%). The histogram MACD has moved up in line with the rise in the Nifty and as long as it remains above the median level the bulls are in control.
Here are some key levels to watch out for this week
•As long as the S&P Nifty stays below 5,401 points (pivot) the bulls can breathe a bit easy though the bears continue to be in control.
• Support levels in declines are pegged at 5,354 and 5,321 points.
• Resistance levels on the upside are pegged at 5,433 and 5,481 points.
We saw the bulls succeeded in holding the Nifty around the 5,400 mark, but on the other hand they were unable to make any headway even though they have been in control. The volumes continued to be poor and the volatility has shrunk, expecting us to believe that a swift either side move is likely as it expands, but there is no clue as to the direction as yet. The simplest stop loss one can keep on longs is the last week’s low of 5,368 points in close as we wait for the market to decide its immediate future course. One thing is clear that the bulls hold the edge even though the volumes are poor and they have not been able to make any headway in the last couple of weeks.
(Vidur Pendharkar works as a consultant technical analyst & chief strategist at www.trend4casting.com.)