Nifty has strong resistance at 5850: Angel Broking

According to technical report on Indian market by Angel Broking, Nifty may resume their existing down trend to test 5740-5712 levels. On the flipside 5850 mark remains to be a strong resistance for the Nifty.

Yesterday once again indices opened higher in line with other global indices and moved marginally above the mentioned resistance level of 19239 / 5820. However, the actual trading range was extremely narrow and eventually indices closed just below the 19239 / 5820 mark. During the day, Realty, Capital goods and Metal counters were among the major gainers whereas FMCG and Consumer Durables ended on a losing side.

Trading strategy:

For the second consecutive session, we witnessed a gap up opening in our market and in-line with our expectations, struggled around the mentioned resistance zone of '89-day EMA' and '20-day EMA'. Both averages are placed at 19293/5820 and 19322/5850, respectively. The daily candle now resembles a 'Dragonfly Doji' Japanese candlestick pattern. An occurrence of such pattern near resistance zone indicates uncertainty and possibility of a corrective move if indices sustain below yesterday's low of 19195/5795.

This may trigger intraday pessimism in the market. In this scenario, indices may resume their existing down trend to test 18989-18931/5740-5712 levels. On the flipside, 19322/5850 mark remains to be a strong resistance for the market. Only a move beyond this level would nullify the negative impact of above mentioned technical evidences.

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