Nifty started the week on a negative notemaking a low of 10782.6 but the market improved in last two trading session toclose above 11100. The index witnessed a sharp recovery post Repo rate cut by35 basis point to 5.4% in latest monetary policy.
There is also speculation that thegovernment could take decision to dilute surcharge on FPIs which triggered therally in the last two trading session.
The auto and NBFC crisis is continuouslydragging the market and a currency war triggered by the devaluation of Chinesecurrency has also put rupee under pressure which is a little sign of concern asof now. If you look at the monthly chart of USD-INR, it took support last monthand inched higher suggesting further weakening of Indian currency in the comingperiod.
In the hourly chart, Nifty confirmedbreakout on Thursday when index closed above 50 Moving average and the downtrendline on an hourly timeframe. The strength continued on Friday when the indexopened gap up of more than 50 points and broke another important trend line inthe hourly chart and presently taking support on it.
Most technical parameters including RSI, CCI, Stochastic and MACD looks positive in the hourly chart and trading very close to the upper bound suggesting strength in the short term. Probable support comes at 100 period SMA at 11070 and probable resistance at 11200 and 11300.
In the daily chart, Nifty faced resistancefrom the convergence of 200 Day SMA (11167) and daily resistance area; likelyto stay weak until the stock closes and sustains above 200 SMA.
Technical parameters look neutral to weak as of now and likely to see change in trend until index sustains above 11200 level on a closing basis.
Nifty bounced from 100 period SMA (10860) lastweek but faced resistance from 50 SMA (11153), the consolidation is likely forfew days and breakout either side of the range may lead to fresh direction.
On the downside, 100 MA at 11860 is a strong support and weekly close below which may lead further weakness in the index in the medium term.