Nifty manages to close above 5900 mark - Angel Broking

Sensex (19417) / NIFTY (5906)

Yesterday, our markets opened slightly higher and then went on to break the resistance of hourly '20 EMA'. This resulted in a strong intraday rally of nearly a percent. Eventually, Nifty managed to close well above the psychological level of 5900 mark. The Capital Goods, Banking and Realty counters were the outperformers during yesterday's session; whereas only IT sector ended with very nominal losses. The advance to decline ratio was in favor of advancing counters (A=1527 D=1414) (Source -www.bseindia.com).

Formation

- The '20-day EMA' and the '20-week EMA' are placed at 19212 / 5845 and 18552 / 5636 levels, respectively.

- On the weekly chart, we are witnessing a breakout from 'Downward Sloping Trend Line' joining two significant swing highs of 19811 / 5944 (April 2011) and 19137 / 5815 (Oct 2012) at 19050 / 5800 level.

- The 38.20% and 50% Fibonacci retracement levels of the rise from 18255 / 5548 (low on November 20, 2012) to 19612 / 5965 (high on December 11, 2012) are at 19100 - 18930 / 5806 - 5755, respectively.

- The daily 'RSI' oscillator, '3 & 8 day EMA' and the daily ADX (9) indicator are negatively poised.

Trading strategy:

Indices opened higher in Wednesday's session and eventually managed to cross the hourly '20 EMA'. The markets nearly tested the 19491 / 5926 resistance level mentioned in our earlier report. We are now observing that indices faced resistance at the hourly 'Trend Line' as shown in the chart. Hence, a sustainable move beyond 19491 / 5926 level would result in a strong breakout and may lead to an intraday rally towards 19612 / 5965. On the flipside, yesterday's low of 19274 / 5860 may act as a key support for our markets.

The coming trading session is expected to trade with high volatility on account of December series Derivative expiry.

Source : Equity Bulls

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