Business setup: Nifty could carry out a defined area specific consolidation

Synopsis

“For Nifty to continue its upward trend, it would be crucial to keep its head above the 17790 level. If the index slides to that point, it will push towards an imminent consolidation.”

Market Outlook for Monday 09/27/2021

 The previous five days of the week had been largely buoyant. However, Nifty continued to rise one day and consolidated the other day as it rose on alternate days. On Friday, Nifty hit its new all-time high of 17,947 and broke out of the daily high, though it still ended in nominal gains. Markets got off to a positive start to the session and peaked in morning trading. After that, however, the Nifty slid into a bearish trajectory, losing all of its gains by one point. Although it never fell into negative territory, the general index closed with a net gain of 30.25 points (+ 0.17%).

The day should start quietly on today. We enter the maturity of the current monthly derivative series. Weekly options data indicates that the Nifty could face a definite consolidation in a certain range, while other sector indices such as Bank Nifty, PSE Index, Auto, etc. they could show an improvement in their relative performance. For Nifty to continue its uptrend, it would be crucial to keep its head above the 17790 level. If the index falls at this point, it will push towards an imminent consolidation.

Volatility increased slightly; India’s VIX was up 1.93% to 16.9225. The 17,900 and 17940 levels will act as resistance points. Supports are at the 17780 and 17750 levels.

 The Relative Strength Index on the daily chart is 77.89, showing a slight bearish divergence in price. The daily MACD has once again shown a positive crossover; it is bullish now and above the signal line. A black candle appeared; otherwise, no other formation was observed in the charts.

Pattern analysis shows that the ingenious has increased steadily after the large eruption that occurred after the ingenious erupted in areas 1590015950. It further consolidated and formed bases. The index rose further after each of these consolidations. The last base was formed at 17,790. Any slippage below this point will push the NIFTY into a definite consolidation.

Still, there is a high probability that most of the week will be affected by activity focused on the rollover. The inherent strength of markets remains intact; There are currently no visible signs of significant weakness. However, there are some indications that a consolidation is imminent. There are also some indications that the NIFTY could consolidate while other sectors such as Bank nifty, PSE Index, Auto, etc. they could improve their relative strength. We continue to recommend avoiding shorts and keeping very specific new stock purchases. A cautiously positive approach is recommended during the day.

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