Nifty has given a breakout of the falling trendline and taken support from the extended trendline, which suggests upside movement in the counter.
Market opened higher and traded with healthy gains in the first half but weak global sentiment spilled on to the Indian market, as investors took some money off the table.
Despite a bullish opening, domestic indices closed flat with a positive bias amid mixed sentiment among global peers.
Global markets traded cautiously ahead of the US consumer price index to be released today.
The day belonged to the Nifty Media index which has been underperforming other sectoral indices. Huge move today in ZEE Entertainment Enterprises fired up the media index as gains seen in other stocks looked pale in comparison. Broader markets witnessed profit-booking today in stocks that have seen a big run up in recent times.
Concerns over inflation persisted even as India’s retail inflation softened to 5.3 percent in August, which was within the RBI’s comfort zone, but the wholesale price inflation accelerated to 11.39 percent, snapping the two-month easing trend.
Major global markets also witnessed selling ahead of the US inflation data that is expected to influence the Federal Reserve's decision on the coronavirus stimulus.
On an hourly chart, Nifty has taken support from 21HMA (hourly moving average) and sustained above it, which suggests strength for the upside.
Momentum indicators RSI and stochastic are supporting the positive trend in the index. At present, the psychological level of 17500 could be a resistance, while on the downside, 17250 may act as support for the index.
Market is trading within a range and for the bulls, 17450 would be the range breakout level.
Above 17450, Breakout formation could continue up to 17500/17525 level. On the other hand, trading below 17350 could possibly trigger an intraday correction up to 17300/17275 level.
Nifty is in a range of 17250/17450.
Until we cross either side of this range, we will be trading in a sluggish manner. Since the overall trend is positive, a good trading strategy would be to buy this market on dips.
Mid and smallcap indices hit their fresh record highs in intraday trade today. Midcap index closed 1.09 percent higher while the smallcap index ended with a gain of 0.63 percent.