The market continues to remain choppy. Nifty continues to trade in a narrow range and finds support within the pink channel. This is our positive scenario until the support is violated (support exists at 4750). We continue to face stiff resistance at 4835.
IIP numbers were great (17%) -but the upmove wasn't strong enough to take out 4835 on a closing basis. Volumes continue to diminish, indicating lack luster.
Nifty will continue to remain choppy all of this week until we see a decisive break (preferably on the downside).
Taking out 4835 will only lead to our next target of 4940. This in my opinion will be a good opportunity to short the index. However, moving below 4740 will again lead to a shorting opportunity for lower targets of 4450.
What do the indicators say?
1. RSI - continues its feeble attempt to inch up along the wedge.
2. MFI - Taking support along the trendline. A break in the trendline on the downside will lead to a fall in the index.