The 15,900-15,950 zone remained a tough hurdle for Nifty as the 50-pack saw some corrective moves before ending the day with minor losses. The day started positively in the market. Nifty opened with marginal gains and traded in a limited and defined range for the first half of the session. However, the second half witnessed a wave of profit-booking and Nifty broke over 180 points from the day’s high.
There was a slight recovery towards the end, but the headline index ended with a net loss of 78 points (-0.49 percent). Although the downside, which was marginal based on market closing, the Nifty moving above the 180-odd mark from the high point reinforces the importance of the 15,900-15,950 zone on the upside. At lower levels, the market has again moved very close to its 50-DMA, which is currently at the level of 15,652.
This level will now act as important support if the market continues to consolidate and correct within the defined range. The market is in for some technical volatility, but the 15,800 and 15,850 levels could face resistance, as there was a lot of call writing in these attacks. Support comes at the 15,700 and 15,610 levels.
The relative strength index (RSI) on the daily chart stood at 50.19; It has marked a new 14-period low, which is a bearish signal. It also shows a bearish divergence against the price. The daily MACD is bearish and is standing below the signal line. A big black body happened on the candles. Its emergence near the high point reinforces the credibility of the 15,900-15,950 area as a key resistance area.
As long as the 50-DMA is not breached on a closing basis, it will remain in the current sideways consolidation move. The longer the Nifty continues to move sideways, the higher the confidence of any move by either side.