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Nifty

Consecutive ‘Bearish Belt-Hold’ formation post the recent Doji is a sign of stalled upmove as the index slipped towards its 5 DEMA support zone around 18280. Trend strength indicators are also flattening with its RSI turning from its overbought zone it is displaying lack of strength as compared to its earlier swing high while ADX has also been flattening but no sign of weakening. Absolute price action so far has been above its 5DEMA zone which is now placed at 18280. 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 but healthy pause cannot be ruled out. With the result season kicked in expect volatility to remain on the higher side & profit booking led sector - stock rotation to remain high. Its ideal to remain cautious & avoid fresh leverage longs from hereon for a few sessions until volatility settles. Slippages below its 5DEMA zone of 18280 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. For the day a pullback /rebound within its previous day trading range cannot be ruled out as option pain for the Nifty seems shifting towards 18400 while Banknifty looks relatively better placed for renewed strength towards 39800 +/-100 points.

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