Market Outlook: Nifty likely to face considerable resistance between 11,300-11,330

@rex_cano

Mumbai: After a couple of strong trading sessions, the markets turned volatile today as the key benchmark indices neared immediate resistance levels. Global cues were positive as hopes of a fresh stimulus package for the US were revived. Back home, too, talks of a second stimulus package aided the sentiment.

The BSE benchmark index, the Sensex, opened nearly 200 points higher at 38,177 and soon spurted to a high of 38,236. The BSE index, thereafter, turned volatile and slipped into red to a low of 37,831 in noon trades. The Sensex was seen swinging between zones almost throughout the day and eventually ended almost flat at 37,973 – down mere eight points.

Among the Sensex 30 stocks, UltraTech Cement surged 3.5 per cent. TCS, Tata Steel and Titan Industries rallied 2.5 per cent each. HDFC and Reliance Industries were the other major gainers. On the other hand, ONGC slipped nearly 4 per cent. IndusInd Bank, PowerGrid Corporation, Axis Bank, HCL Technologies, NTPC, ITC and Bajaj Auto shed 2-3 per cent each. Bharti Airtel, Bajaj Finserv, ICICI Bank, Hindustan Unilever, Tech Mahindra, Bajaj Finance, SBI and Kotak Mahindra Bank were the other prominent losers.

Also Read: Market Outlook: Pull-back likely to continue; Nifty may test its 20-DMA

On Tuesday, the BSE Sensex has not given any fresh indication on the weekly or monthly Fibonacci chart, thus the outlook as per the weekly and monthly chart continue to remain positive with strong support likely around 37,400-37,450. On the upside, the BSE index can rally up to 38,340-38,630.

As per the daily Fibonacci chart, on Wednesday, in case of an up move the BSE Sensex may face resistance around 38,125-38,175-38,225. On the other hand, in case of a decline the Sensex is likely to seek support around 37,820-37,770-37,720.

The NSE Nifty tested its 50-DMA (Daily Moving Average) in trades today and then retraced a bit on account of profit-taking. The NSE index from a high of 11,304, declined to a low of 11,181 and finally ended a tad in red at 11,222.

The NSE index is within striking distance of a crucial juncture, where its 20-DMA and 50-DMA are about to converge. The NSE index needs to clear the resistance area 11,300-11,330 clearly for the up move to continue. Sustained failure to close above the 20-DMA can attract a fresh bout of selling pressure. In case, the Nifty falters the index may drift back towards the lower-end of the Bollinger Band at 10,950-odd level.

Among the key momentum oscillators on the daily chart the Slow Stochastic is clearly in favour of the bulls. The DI (Directional Index) and the MACD (Moving Average Convergence Divergence) are now marginally negative. The 14-day RSI (Relative Strength Index) is in the neutral zone.

Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.