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Nifty

Post a series of gaps the index has witnessed a ‘Doji’ formation which can be attributed as a Star within the ongoing upmove. With its RSI now again hitting its respective overbought zone it is also displaying lack of strength as compared to its earlier swing high. So far it has been maintaining its tail above its 5DEMA zone which is now placed at 18220. A close below the same could unlock the corrective action within the Broadening formation while a pullback towards the same cannot be ruled out on immediate basis. Both its trend strength indicators are trending higher & not displaying any major signs of weakness /pauses yet. But proximity towards the upper end of the ongoing Broadening pattern with its weekly resistance zone also coinciding around 18440 its ideal to remain cautious & avoid fresh leverage longs from hereon. With the result season kicked in expect volatility to remain on the higher side & profit booking led sector - stock rotation to remain high. Slippages below its 5DEMA zone of 18220 would result into a temporary pause in the uptrend which could lead into a consolidation phase. Though larger degree trend still remain positive any pullbacks within the broadening formation would provide opportunities to realign trading folios for the next leg of bullish momentum.

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