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Trade setup: Big rally unlikely as Nifty50 to consolidate a bit more

Wednesday’s session may see a flat start, with 11,995 & 12,050 levels acting as resistance.

Nov 19, 2019, 07.57 PM IST
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The daily MACD was bearish and traded below its signal line. Apart from a small white body, no significant formations are observed on the candles.
NEW DELHI: After taking a day’s breather, the domestic stock market resumed its rally on Tuesday, as benchmark indices ended with decent gains. The market saw a modestly positive start and consolidated in a broad range during the session. Fuelled once again by short covering, NSE Nifty settled with a gain of 55.60 points or 0.47 per cent at 11,940.10.

The headline index has been trading in a broad 11,800-12,050 range, and remains under consolidation.

The 50-stock pack is exhibiting indecisive behaviour just like in a classic consolidation phase. This is evident from small real bodies on the candles and from the negligible change in open interest on a closing basis.

Nifty is set to remain under consolidation unless it falls below 11,800 or convincingly moves past the 12,050 level. Unless this happens, we will see the market continuing to trade in a broad range without any clear directional bias.


Wednesday’s session is likely to see a flat start, with 11,995 and 12,050 levels acting as resistance. Supports are expected to come in lower at 11,880 and 11,810, and trading range is expected to get wider.

The Relative Strength Index (RSI) on the daily chart stood at 64.03 and stayed neutral, showing no divergence against the price.

The daily MACD was bearish and traded below its signal line. Apart from a small white body, no significant formations are observed on the candles.

All in all, the stock market is likely to stay in a broad range in the short term. The technical picture suggests that upmoves should be chased very cautiously and profits should be protected at higher levels. In the event of a fall, volatility is likely to increase with the range getting wider.

Nifty is currently trading in a consolidation zone and is expected to exhibit a lack of directional bias in the short term, unless the key levels on either side are taken out.

(Milan Vaishnav, CMT, MSTA, is a Consultant Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of

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