Market outlook: Nifty should gain strength; has key resistance at 10,065




In absence of any negative overnight news flow, the Nifty50 will continue to the process of strengthening itself. NSEBSEWiproLoading data…

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        ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES In our Monday’s note, we had mentioned about distinct possibilities of the benchmark Nifty50 due for a decisive move. In line with this analysis, the market opened positive, got stronger during the day on Monday, and finally ended the day with decent gains of 71.25 points or 0.72%. There is a high probability that the market will see further rise on Tuesday.

        In absence of any negative overnight news flow, the Nifty50 will continue to the process of strengthening itself. The 10,065 and 10,150 levels are likely to act as key resistance on Tuesday. The 9,965 and 9,910 levels will act as likely supports.

        The Relative Strength Index or RSI on the daily chart stood at 58.1749 and it does not show any divergence against the price. The RSI has marked a fresh 14-period high which is bullish. The Daily MACD stays bullish while trading above its signal line. On the candles, a rising window occurred. This is essentially a gap on the upside and in most cases results into continuation of uptrend.

        The pattern analysis show that the market is attempting to break out on the upside from the narrow consolidation area that it has formed over past couple of days. While doing so, it continues to trade comfortably in the upward rising channel that it has formed over the past couple of months.

        The market has attempted to up move and out of the congestion zone with higher volumes. Further to this, the up move has come with an increase in Open Interest which shows addition of fresh longs. We expect the buoyant undercurrent to continue. It is expected that while the market makes an advance, it will also continue to see mild profit taking bouts at higher levels. We recommend continuing to make select stock specific purchase while remaining vigilant at higher levels. Positive outlook is advised for the day.

        STOCKS TO WATCH
        Stocks like Petronet, Federal Bank, PTC, GAIL, TATA Power, REC, JSW Steel saw fresh longs being added. Shorts were seen being added in stocks like SBIN, ICICI Bank, Wipro, Axis Bank, Kotak Bank, LIC Housing Finance, M&M, and Bharti Airtel.

        (Milan Vaishnav, CMT, is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. Contentions made in this article are mere observations. Investors should consult their financial advisers before taking any positions based on these remarks. Views expressed are the author’s own do not represent those of ETMarkets.com. The author can be reached at milan.vaishnav@equityresearch.asia)




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