50-day SMA key for fol­low-up buy­ing sup­port

Now fol­low us on In­sta­gram, Face­book & Twit­ter at mon­ey­times_1991 on a daily ba­sis to get a view of the stock mar­ket and the hap­pen­ings which many may not be aware of.

Money Times - - Front Page - By San­jay R. Bha­tia

The mar­kets re­mained volatile as they strug­gled to sus­tain at higher lev­els on lack of con­vic­tion and fol­low-up buy­ing sup­port. How­ever, the Nifty bounced back from the 9750 level, which is a pos­i­tive for the mar­kets. The FIIs re­mained net sellers in the cash seg­ment but re­mained net buy­ers in the de­riv­a­tives seg­ment. The DIIs, how­ever, re­mained net buy­ers dur­ing the week and were seen sup­port­ing the mar­kets at reg­u­lar in­ter­vals. The breadth of the mar­ket re­mained neu­tral amidst low vol­umes, which in­di­cates lack of con­fi­dence at higher lev­els. Crude oil prices re­mained range­bound be­tween $48-53 due to a fall in in­ven­tory but high out­put lev­els are likely to weigh on the sen­ti­ment. The US mar­kets witnessed buy­ing sup­port at the lower lev­els. Tech­ni­cally, the pre­vail­ing pos­i­tive tech­ni­cal con­di­tions helped the mar­kets bounce back above the 9750 sup­port level. The MACD, Stochas­tic, RSI and KST are all placed above their re­spec­tive av­er­ages on the daily chart. Fur­ther, the Nifty is placed above its 50-day SMA, 100-day SMA and 200-day SMA. The Nifty’s 50-day SMA is placed above its 100-day and 200-day SMA, its 100-day SMA is placed above its 200-day SMA in­di­cat­ing a ‘golden cross’ break­out.

These pos­i­tive tech­ni­cal con­di­tions could lead to fol­low-up buy­ing sup­port at higher lev­els.

The pre­vail­ing neg­a­tive tech­ni­cal con­di­tions, how­ever, still hold good. The MACD, Stochas­tic, KST and RSI are all placed below their re­spec­tive av­er­ages on the weekly chart, which could lead to profit-book­ing and sell­ing pres­sure at higher lev­els.

The -DI line is placed above the ADX line and the +DI line and also above 29. But it has come off its re­cent highs, which in­di­cates that the sellers are cov­er­ing shorts reg­u­larly.

The Nifty has found sup­port and bounced back above the

9750 level, which au­gurs well for the mar­kets. It is im­por­tant for the Nifty to sus­tain above its 50-day SMA in or­der to move higher and test the 9915 level fol­lowed by 10000.

The mar­ket sen­ti­ment re­mains cau­tiously pos­i­tive. In­ter­me­di­ate bouts of volatil­ity and chop­pi­ness are likely to be witnessed due to the F&O ex­piry on Thurs­day this week. In the mean­while, the mar­kets will take cues from the earn­ings sea­son, Par­lia­ment ses­sion, global mar­kets, Dol­lar-Ru­pee exchange rate and crude oil prices. Tech­ni­cally, the Sen­sex faces re­sis­tance at the 31610, 32273 and 32325 lev­els and seeks sup­port at the 30921, 30680 and 29365 lev­els. The re­sis­tance lev­els for the Nifty are placed at 9915, 10000 and 10115 while its sup­port lev­els are placed at 9838, 9790, 9750, 9638 and 9500.

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