Tough the market witnessed some volatility in the last hour of the trade on Thursday, the session remained relatively quiet and the benchmark Nifty50 traded in a 30-point range before ending yet another day with gains and closing at a new high. On Friday, we expect this momentum to continue in the first half of the session, but some resistance may come in near the 9,200 mark. We can also expect minor profit taking at these levels. However, this will remain limited and the Nifty may oscillate in a defined range.
The 9,195 and 9,220 levels will act as immediate resistance for the Nifty50. Supports will come in at 9,135 and 9,100 levels.
The Relative Strength Index or RSI on the daily chart stood at 66.5104 and it showed a bearish divergence against the price as the Nifty50 set a fresh 14-period high while RSI has not.
What’s up ahead: Nifty50 may continue positive momentum, resistance at 9,200
The daily MACD still trades below its signal line and it is bearish, but it has flattened its trajectory. No major formations are observed on candles.
Pattern analysis showed completion of a throwback that had occurred after the Nifty50 broke out above the 9,000 mark. Prices came close to those levels and then pulled back after taking support in the area from where it broke out. This validates and completes the entire formation. The market has now attempted to form a breakout at close, but still has to move past the intraday highs.
Overall, we expect the uptrend to continue but the levels near the 9,200 mark needs to be monitored closely. There is a fair chance that the market may witness minor correction pressure in the 9,200-9,230 zone, as suggested by the F&O data. Also, the lead indicators will show some more exhaustion at higher levels. It is recommended to use all further upward moves to protect profits on existing holdings while effectively churning sectors for better relative performance.
STOCKS TO WATCH:
1. RIL: Buy Reliance IndustriesBSE 0.96 % above Rs 1,275 with a short-term target of Rs 1,320. After some retracement from the recent highs and after digesting negative news flows, the stock is set for resumption of upward move. A bullish hammer, though not so classical, emerged a day before. This is a kind of reversal pattern which shows likelihood of up move. The lead indicators also point towards likely resumption of upward movement in the stock. (Any call on this above the prescribed level would be positional and not intraday.)
2. RelaxoBSE 1.43 % Foorwears: Buy and accumulate Relaxo above Rs 490 with short-term investment horizon of Rs 590. The stock has thrown up multiple signals that can see it moving higher. A Golden Cross is seen with the 50-DMA cutting into the 200-DMA from below. The RSI has shown a pattern breakout and a positive divergence while the MACD remains in continuing buy mode. (Any call on this above the prescribed level would be positional and not intraday.)