Nifty likely to get into a corrective downward wave; Buy Wipro, sell ICICI Bank for short term

“Nifty breaking out cluster of resistances placed around 10,570 to 10,600 is unlikely as of now” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.

The Nifty previous Friday ended 0.01 percent down at 10,564.05. Its range bound movement below the cluster of resistances placed around 10,570 to 10,600 continued for the fourth consecutive session.

Day long oscillation within a tiny range for the entire session led to a Doji candle on daily chart. On the weekly chart it ended 0.8 percent up. Higher highs- higher lows pattern continues on the weekly chart towards ending with another bullish Marubozu candle, which implies this uptrend is likely to pull ahead towards pivotal resistances placed around 10,630 and 10,700. Hence, buy-on-dips is the strategy to be followed.

However, ending the last trading session of the week with a Doji candle implies hesitancy among traders may persist in the beginning of the next week. Hence, buying-on-dips is advised. Bulls may find down side critical supports placed around 10,480 and 10,420 very alluring.

On the Nifty hourly chart; negative divergence in RSI is still intact, which may continue building selling pressure on rise around 10,570. Midway resistance is placed around 10,530.

Nifty patterns on multiple time frames show; it ended on indecisive note on the last day of the week. Hence, nervousness may persist in the first half of the week. However, considering the broader trend, we prefer buy on dips around critical supports placed around 10,480 and 10,420.

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