Gap filled, Nifty entered in sideways zone, trade range could be 11,290 to 11,554
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Heavy volatility in last few trading sessions has put the traders in the dilemma. Sharp sell-off at higher levels has shaken the bull’s confidence and in coming days, we could see the ambiguity to continue as far as trend concerned.
Indecisive candle on weekly chart followed by big red candle suggesting that upside momentum has been abated for the time being. And if 11,290 trade on the lower side, then we could see lower levels in the coming week till 11,150 and 11,061. The sideways move is likely to continue, and the previous week high (11,694.85) will remain the key resistance in the coming days. The new round of the buying should be expected only once the aforesaid level trade on higher side on closing basis.
The 38.2 percent retracement of the latest sharp swing move comes at around 11,290, which will act as a short term support level for the traders. Last week, we have seen violation of the level twice but the same has been respected at the time of closing.
If it violates again and closes below that level, it would deteriorate the sentiments further and the bears could take the move till 11,150 and 11,061. The Nifty is trading above all major medium and long term moving averages, so the prices could expect some cushion at lower levels. Apart from this, a gap in the daily chart has been filled and there is formation of ‘Doji’ candlestick pattern on Thursday’s trading session after testing the 50-day Moving Average.
Now, we could see the prices to go sideways between the range of 11,290 and 11,554. RSI on the daily chart has moved back in the sideways zone suggesting that ongoing momentum could lose the steam and traders can expect some stable moves in days to come. The immediate resistance for the week is 11,370 which, if breaks on the higher side, could strengthen the bulls further till the level of 11,554.
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