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Contrary to expectations, the stock market did not remain volatile on the expiry day of the current derivative series on Thursday.
After opening higher and trading stable, the NSE benchmark Nifty gathered strength in the second half of the session to move past 50 DMA and 100-DMA. However, the index tested its 200-DMA and halted near this important level. Nifty finally settled with a gain of 179.15 points or 1.68 per cent. As we head into interim Budget on Friday, we expect the market to to trade volatile. It will not be helpful if we just technically analyse the market in isolation. More so, the Friday’s event is speculated to be a full-fledged Budget. So, given the likelihood of volatility returning to the market once again, it will be meaningful if we take a broad picture of the market within the technical parameters. We see a steady start on Friday and expect a rangebound trade until the Budget announcements start rolling out.67778268

From the technical point of view, Nifty has halted near the 200-DMA, which is at 10,842. This level cannot be disregarded, and it remained an important resistance level on a closing basis.Apart from this, we expect the levels of 10,900 and 10,940 providing stiff resistance on the upside. Supports may come in at 10,780 and 10,750. Despite all likelihood of Nifty oscillating in a volatile way, the zone of 10,900-10,950 continue to remain a major resistance zone. Regardless of Budget announcements, unless these levels are taken out, meaningful rally will not begin. The RSI on the daily chart was neutral and showed no divergence against the price. The daily MACD remained bearish while trading below its signal line. We strongly recommend continuing with a stock-specific approach and vigilantly protect profits at higher levels. The up moves, if any, should not be chased blindly unless they result into a move that takes the market beyond its key resistance zone. A cautious approach is advised for the day. (Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)