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Nifty

Despite the gap up opening Nifty witnessed profit booking throughout the day as it faced supply pressure near the 18400zoneasitclosed the day marginally above it. On its daily scale it looks like a ‘Broadening’ pattern in formation stages with its bounds placedat18460-17980 as of now.Its trend strength indicators still compliment the ongoing bullish mode to sustain as ADX is trendinghigheraround its 34 level while RSI is yet to hit its overbought zone with no major signs of exhaustion or divergence yet. Hence wemaywitnessconsolidation within this ‘Broadening formation’ in the coming weeks ahead. The ongoing sequence of gaps is also yet towitnessan‘Exhaustion Gap’; which could eventually establish a probable top once confirmed. On the broader scale area around 18300hasremained as a supply zone hence leverage positions should be avoided. Though we are yet to witness any distortion or divergingsignalswithin the ongoing trend its ideal to remain cautious once around 18300-18460 zone where booking profits could be healthy, butavoiding any fresh leverage on either side should be one’s priority. Hence its ideal to maintain existing non leverage long positionswithatrailing stop loss at 18130. While 17880 could be considered as a yardstick level to gauge any sudden breakdowns or reversal trendsifthey unfold during this month.

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