After a strong rally what we have seen in the recent past, Nifty currently is in consolidation phase. Tech parameters suggest possibility of extended consolidation before the up move resumes. Overall, the trend of the market is positive, but a pause in the positive momentum with negative divergence in the RSI indicators suggests some consolidation is required for a decisive move beyond its lifetime high of 11761. It has immediate support near the 11600 mark while hurdles are placed at 11760 level. A decisive range breakout is required for the next leg of rally. We continue to believe the bias remains positive and suggest buying on dips. Meaningful Support on the downside is seen at 11550-11500; Expect volatility to remain high in the near term. On the higher side we would expect 11800-12000 on Nifty.The RBI’s money policy & Skymet’s prediction of below normal monsoon due to developing El Nino took the market down. On the time of closing the Sensex was down 179 points at 38877, while Nifty closed down 69 points at 11644. The Sensex and Nifty touched record high in the early trade today. The Nifty surged as much as 48 points to an all-time high of 11761 and Sensex climbed as much as 197 points to 39253. RBI’s strong intent on supporting economic growth under governer Shaktikanta Das, with inflation under control, is evident. It will therefore come as no surprise if the Central Bank chose to cut Repo once again by 25 basis points. But I believe that the RBI should focus only on addressing the liquidity situation in the economy, wherein the real problem lies.
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Resistance: 11800, 11900,
12000
Support: 11600,
11550, 11500
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