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Nifty

Sequence of narrow ranged bodies continue to exhibit lack of incremental strength despite of the index maintaining its tail aboveits5DEMA level of 18330. Broader market witnessed profit booking throughout the day as it faced supply pressure once Nifty wasnearthe18400-18460 distribution zone. 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 are now turning flat as ADX now dipped to 35 while RSI is around 66; with nomajorsignsofdivergence yet. Hence, we may witness consolidation within this ‘Broadening formation’ in the coming weeks ahead. Theongoingsequence of gaps is also yet to witness an ‘Exhaustion Gap’; which could eventually establish a probable top once confirmed. Onthebroader scale area around 18300 has remained as a supply zone hence leverage positions should be avoided. Though we areyet towitness any distortion or diverging signals within the ongoing trend its ideal to remain cautious once around 18300-18460zonewherebooking profits could be healthy, but avoiding any fresh leverage on either side should be one’s priority. Hence its ideal tomaintainexisting non leverage long positions with a trailing stop loss at 18130. While 17880 could be considered as a yardstick level togaugeanysudden breakdowns or reversal trends if they unfold during this month.

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