Nifty could face hurdles on further rise - PINC Technical Report

Nifty (4750 – down 29 points)

The Nifty opened the day muted and touched a high of 4800 by noon. It retraced most of its morning gains thereafter and struggled with weakness to close the day near to the lower end of the day's trading range at 4750, down 0.60%. The broader market underperformed the Nifty; S&P CNX 500 was down 0.64% and CNX Midcap was down 0.75%.

The last few days' price move of the Nifty confirms the view that the short-term uptrend that has begun from 4530 could be losing momentum. However, this doesn't change the fact that the uptrend from the last week's low of 4530 is still on. The last few days move only means that the Nifty could face hurdles on any further advances. Resistance on the upside should emerge at 4800-4850 zone. The level of 4700 is a pivotal support below which it could result in another leg of decline possibly towards the earlier low of 4530. On the other hand, one of the positive outcomes of the upmove in the last few days has been that it has confirmed our earlier hypothesis that any sustained downtrend over the medium term now appears minimal. The positive divergences and oversold technical indicator support this proposition too.

The Midcap Index continues with its weakness and underperformance versus the Nifty. The upmove from around 6000 indicates that it could only be a pull back within an ongoing downtrend. Any advances from current should most likely counter selling pressure.

Source : Equity Bulls

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