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Nifty

Momentum remained tepid in yesterday’s session as the index consolidated below the 26000 level. The 9th consecutive session above its 5 DEMA support is a sign of continued strength. The ongoing momentum is expected to sustain until the index holds its close above its 5-DEMA support of 25750 while a breakout above 26030 would accelerate the move towards 26272. Rising 5 DEMA and expanding ADX over 34 is a reassuring indication of incremental trend strength. Options data ahead of the monthly expiry shows a firm support base around 25500 and 25800, with a possible upside up to 26200 once the index surpasses the 26000 OI cluster. A shift in trend, if any, will only be anticipated if the index records a weekly close below 24860 as it has been able to sustain its price action above its 5 WEMA support for 20 weeks consecutively. Momentum needs to be maintained until 25740 holds, and after the index reaches the anticipated target zone at 26272, positions must be reviewed. Until there is a definite indication of a reversal on its weekly scale, buying the dips is still a smart approach, since significant sector rotation is expected to continue for some time.

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