Nifty - Technical Outlook - December 31, 2012 - IDBI Capital

On Friday, the session has ended by forming an "Inside Day Candle" on the daily charts. While, the action indicated of a confused and indecisive session within previous day's trading range. At the opening bell, Nifty started the session on a positive note; however, for the most part of the day, Nifty traded with a negative bias and during the fag end, strong buying emerged from the day's low and Nifty managed to settle the session at 5908 with 38 points gain on the weekend. In the past week, Nifty has traded volatile with a positive undertone but on the contrary; it failed to breach the congestion range of 5823 to 5965.On the oscillator's fronts, RSI & MACD have scaled higher but still they are placed below the trigger. The market breathes have turned positive with a dip in the volumes compared to the previous day.

Technically, the weekly set up is Engulfing Bullish candle and it suggests that bulls are putting efforts to defend 5823 mark. However, the recent consolidation phase is shaping up in a Flag formation on the daily charts. While, if Nifty breaks the upper band (5965) decisively then Nifty could witness an impulsive rally towards 6125 in the short run. And on the lower side 5823 will act as crucial support for the ongoing trend. On the back of the mixed international cues our markets are expected to open on a flat note; while indices may trade sideways to volatile for the day. However, any contrarian call will be covered during the trading sessions. Therefore day traders are suggested to first take a clue from the initial half an hour range in Nifty and then trade accordingly in the direction of the breakout. Intraday support levels are placed at 5876 and 5815 whereas the resistance levels are placed at 5930 and 5988.

Source : Equity Bulls

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