Regular follow-up buying support needed
The markets finally corrected last week due to the prevailing overbought conditions, rise in crude oil prices and depreciating rupee. Intermediate bouts of profit-booking and selling pressure were seen as buyers unwound their long positions. The FIIs remained net sellers in the cash segment but were seen hedging their positions by remaining buyers in the derivatives segment. The DIIs remained net buyers but they were seen booking profits at the higher levels. On the global front, crude oil prices rose with Brent moving above the $78 mark as concerns of ban on Iran oil exports loomed on the market sentiment. On the domestic front, the rupee continued to depreciate and traded around 72 against the US dollar. Technically, the prevailing negative technical conditions still hold good. The MACD, KST and RSI are all placed below their respective averages on the daily chart. Further, the Stochastic is placed below its average on the weekly chart. Moreover, the RSI and Stochastic are placed in the overbought territory on the weekly chart while the RSI is placed around the overbought territory on the weekly chart. These negative technical conditions could lead to intermediate bouts of profit-booking and selling pressure especially at the higher levels.
The prevailing positive technical conditions, however, still hold good. The MACD, KST and RSI are all placed above their respective averages on the weekly chart. Further, the Stochastic is placed above its average on the daily chart as well. Moreover, the Nifty is placed above its 50-day SMA, 100-day SMA and 200-day SMA, which is its long-term average. The Nifty’s 50-day SMA is placed above its 100-day
SMA and 200-day SMA and its 100-day SMA is placed above its 200-day SMA, indicating a ‘Golden Cross’ breakout. These positive technical conditions could lead to regular buying support.
The +DI line is still placed above the -DI line and above 25.
But it came off its recent high last week, which indicates that buyers have booked profits. However, the ADX line is placed above 32, which indicates that buyers have an upper hand.
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