Jan 14, 2013, 09.30 AM | Source: Moneycontrol.com
According to technical report by Angel Broking, if Nifty manage to sustain below the 20-day EMA’, then expect a corrective move towards its next support levels of 5897-5842.
, Angel Broking |
On Friday, our benchmark indices opened higher since the IT giant Infosys delivered stellar results. However, a whopping intraday rally in excess of 15% in Infosys could not stop the bears to push indices lower and eventually indices closed marginally above 5950 mark. During the session, IT (9.34%) and Teck (6.57%) sectors were the major gainers; whereas FMCG, Realty and PSU counters ended with heavy losses. The advance to decline ratio was strongly in favor of declining counters.
Trading strategy: Last week’s strong closing is followed by a muted week. Despite positive opening on most of the trading sessions, indices traded with negative bias and corrected gradually during the week. At present, we are observing that indices are now approaching ’20-Day EMA’, which is considered as a decent support level. However, negative placement of ‘RSISmoothened’ and ‘3 & 8 EMA’ on the daily chart amidst a corrective chart structure in many index heavyweights indicates at a possibility of a near term correction in the market. In addition, ‘Negative Divergence’ in the daily ‘RSI’ momentum oscillator is still intact.
Hence, in the coming week, if our benchmark indices manage to sustain below the ’20-day EMA’, then we can expect a corrective move towards their next support levels of 19406-19221/ 5897 5842. Conversely, a sustainable move beyond this week’s high of 19857/ 6042 would certainly nullify all possibilities of a short term correction.
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