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Nifty

Nifty encountered resistance and gave in to pressure from profit taking in the 19800 zone. According to expectations, thecurrentcorrective wave should ideally complete time-correction before crossing 19840. Despite the fact that both of its trendstrengthindicators have been steadily deteriorating, they have not yet manifested any significant signs of a severe weakness, whichsupports the idea that the present price correction is a part of the larger upward trend. The support base locatedbetween19600and 19500 has been confirmed again by yesterday's close above the 5DEMA support. While the seasonality factor scoreforAugust is still high, the 5-year average gains show a similar tendency to July's gains of close to 3%. For a time, traders shouldmaintain their caution and refrain from chasing momentum. They shouldn't increase their long positions if they don't haveenough hedging. Only if the 19430 support is continuously violated will the strategy change; otherwise, expect consolidationmode to continue throughout the week within 19800-19500. While 19840 itself serves as the breakout level for regainingmomentum strength.

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