Indian markets likely to witness gap-up start; market participants all ears to RBI monetary policy
The benchmark index gained 144.35 points or 0.82 per cent on the weekly derivative expiry. As expected last week, Nifty is consolidating around the 20-DMA. It gained 172.2 points or 0.98 per cent in the last five trading sessions. It climbed 431.7 points from Friday’s low. The daily ranges are higher than earlier, as it moved at least 200 points for four days in the last five trading sessions. After closing below the 20-DMA, the index got bullish confirmation with a gap-up opening on the very next day and closed above the Doji high.
Today, Nifty formed an inside bar as it traded within Wednesday’s range. It does not have any trend change implications. The consolidation may continue between the 20-DMA (17,621) and the previous high of 17,748. Below 17,621, the immediate support is at 17,452, which is Friday's low and can also be considered as a minor swing low. Unless the index breaks this range decisively, the market will be in a strong uptrend. The benchmark has not made a lower low. In any case, if Nifty fails to move above Wednesday's high of 17,884 and declines below 17,452, the market structure will change to lower high & lower low, which is a classical minor downtrend.
Nifty is still trading below the upward channel for the last five trading sessions. Even on the weekly chart, it is forming an inside bar. The level of 17,452 is again a critical level to get the confirmation for the last week's dark cloud cover. The daily RSI has formed lower highs and lows. The zone of 58-68 is significant for the continuation of the reversal signal. The MACD histogram is still in the negative zone. The Elder impulse system is showing that Nifty is in a neutral zone. Pring's KST has given a bearish signal. The level of 17,885-17,613 is a critical zone for Friday.
For the next week, the level of 17,948-17,452 is an important zone. Either side breakouts will give clarity on the trend. Stay cautiously optimistic!