Markets are indecisive
The markets remained rangebound last week. Though the Nifty managed to move above the 10770 mark, it failed to sustain at the higher level due to lack of follow-up buying support. The markets witnessed intermediate bouts of profit-booking and selling pressure due to overbought conditions. The breadth of the market remained negative amidst low volumes.
The FIIs turned net sellers in the cash and derivatives segment. The DIIs, however, were seen buying at the lower levels and remained net buyers during the week.
The global markets remained volatile. Crude oil prices softened further as US crude inventories rose to the highest level since December 2017 amid concerns of an emerging global glut. However, expected supply cut by
OPEC is likely to prevent further drops. On the domestic front, the fall in crude oil prices is good for the market sentiment and the rupee. Technically, the prevailing negative technical conditions weighed on the market sentiment. The RSI and KST are both placed below their respective averages on the daily and weekly charts. Further, the Stochastic is placed below its average on the daily chart and remains in the overbought zone on the weekly chart. Moreover, the Nifty is placed below its 50-day SMA, 100-day SMA and 200day SMA. The Nifty’s 50-day SMA is placed below its 100day SMA and 200-day SMA signaling a ‘Death Cross’ breakdown. All these negative technical conditions could lead to profit-booking and selling pressure especially at the higher levels.
The prevailing positive technical conditions, however, still hold good. The MACD is placed above its average on the daily chart. Further, the Stochastic is placed above its average on the weekly chart. These positive technical conditions could lead to buying support at the lower levels.
The -DI line has moved above the +DI line but both are
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converging. The ADX line is placed below 17, which indicates indecisiveness and lack of a trend. The Nifty has closed below the 10589 level, which does not augur well for the markets. It is important for the Nifty to move and close above 10589 in order to rise further.
10400 is now an important support level. The market sentiment remains tentative and indecisive ahead of state election results next month. The markets are likely to turn volatile ahead of the F&O segment expiry on Thursday. Meanwhile, the markets will take cues from the news flow on state elections, Dollar-Rupee exchange rate, global markets and crude oil prices. Technically, the Sensex faces resistance at the 35187, 35400, 35606, 36350, 36602 and 37165 levels and seeks support at the 34748, 34344, 33723 and 33349 levels. The resistance levels for the Nifty are placed at 10589, 10625, 10710, 10756 and 10843 while its support levels are placed at 10419, 10340, 10283, 10200 and 10000.