On Thursday, we expect the market to get steady as it reacts to the outcome of the FOMC meeting, which came in on the expected lines. In any case, the 10,150-10,170 zones will continue to pose resistance. Smaller intraday bands that are being witnessed in the past couple of sessions show the market lacks a directional bias. It is poised evenly and can go either way.
On Thursday, the 10,170 and 10,230 levels will play out as key resistance for the Nifty50, while supports will come in at 10,090 and 9,980 levels.
The Relative Strength Index or RSI on the daily chart stood at 64.8543 and it stayed neutral showing no divergence. The daily MACD continued to remain bullish. The market continued to track the upper Bollinger band while trading in the rising channel that it has formed over the past couple of days.
Overall, as the market continued to trade in very narrow intraday bands, there is a chance that we will see sharp a movement either side. Also, with no directional bias over the past couple of sessions, we strongly recommend keeping exposures to moderate levels. Shorting should be avoided, if there is a convincing breach on the higher side as short covering can occur. Until a directional bias is established, stock-specific approach is advised.
STOCKS TO WATCH
Potentially buoyant setup was seen on the counters of ITC, Tata Steel, JK Tyres, REC, Indiabulls Real Estate, and NHPC. Fresh longs were seen in Vedanta, ONGC, Karnataka Bank, Nalco, Tech Mahindra and Wipro.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at email@example.com)