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Nifty

Nifty eventually broke below the 19600 support zone on the final day of the expiry as it succumbed to the negative crossover of its short term averages 5 & 20 days EMA. Nifty continued to witness sharp selling as it closed the day below its previous days low as well. We saw the running trend being breached with a ‘Breakdown or BreakAway Gap’ at 20100 followed by ‘RunAway Gap’ which breached the 19900-support band with strong volumes. Both its trend strength indicators are diverging with RSI falling towards its 42 level while ADX is flat at 32 indicating lack of conviction for an immediate trend reversal. The only scope could be the occurrence for the important ‘Exhaustion Gap’ to be formed around the anticipated retracement support zone of 19500 (19440 is 78.6% retracement support). The hurdle has now shifted lower at 19780 with major resistance at 20000 for the coming weeks ahead. Leverage longs should be added once a firm reversal signal is confirmed above 19790 on closing basis from hereon.

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