For the second consecutive session, the Nifty found support around its 20-DMA as well as near the 38.2% retracement level of the previous upswing. The index formed an inside bar on Thursday, while volumes declined from the previous session.
Counter-Trend Consolidation
The ongoing counter-trend consolidation has now entered its eighth session. Such consolidations often stabilise around the 38.2% retracement level, which keeps the possibility of a near-term bounce intact. However, a close below the 24,265-24,190 support zone would weaken the structure and could extend the corrective consolidation.
CAS Recovery Lifts Nifty Off the Day's Low
On Thursday, the Nifty recovered 42.5 points during the Closing Auction Session (CAS) and settled at 24,395.85. Broader market breadth remained neutral, with the advance-decline ratio at 1:1, while index breadth stayed positive.
The MACD generated a fresh bearish signal, while the RSI stood at 53.33, close to the neutral zone. During the session, the index largely remained within the first-hour range and continued to form higher lows on the hourly chart.
Breakout From Wednesday's Range in Focus
For the upside move to resume, the Nifty needs to close above the previous day's high of 24,431. Beyond this level, the immediate resistance zone is placed at 24,480-24,530.
Interestingly, since the introduction of CAS, the Nifty has frequently formed candles where the opening price is either equal to or close to the day's high. Wednesday's range of 24,265-24,473 therefore remains crucial. A decisive breakout on either side of this range could determine the next directional move.
Stock to Watch: Container Corporation of India (CONCOR)
On the weekly chart, CONCOR is trading close to the pivot point of an ascending triangle pattern. Before forming this base, the stock had corrected 55.35% from its all-time high. Volumes have started to build near the breakout zone, while the Relative Strength line is rising and has moved above its previous high.
The stock is also trading above all key moving averages, with the 30-week average turning upward. The moving average ribbon remains in an uptrend and the Bollinger Bands have begun to expand, pointing to improving momentum. The MACD has generated a fresh bullish signal, while the RSI has moved back into the bullish zone. The Elder Impulse System has also formed a strong bullish bar.
The stock is on the verge of a Stage-1 ascending base breakout. A sustained move above Rs 534 could open the way towards Rs 570. A stop loss may be maintained at Rs 498. If the stock decisively clears Rs 570, the next upside level is placed around Rs 603.
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