After a sharp upmove in last week of May 2019 (from 11400 to 12000 levels), Nifty is currently in consolidation phase between 11700 and 12100. In our last fortnightly report, we had mentioned that 11900-12100 range is crucial resistance zone for Nifty and a decisive breakout above 12100 will see Nifty adding couple of hundred points on the upside before any major profit taking comes.
During the first week of fortnight, Nifty opened higher and rallied to a high of 12103. However, profit taking at higher levels, after the RBI monetary policy was announced (RBI eased rates by 25 pbs), again pushed it back below 12000 levels and Nifty tested a low of 11769, before ending @ 11823. Since last three weeks, Nifty is consolidating in a narrow range of 350 points between 11750 and 12100, forming a base for next major rally beyond 12100 levels. A decisive breakout beyond 12100-11200 levels will set stage for a pre-budget rally towards 12500+ levels.
On the downside, now immediate support for Nifty is placed around 11780 and 11750. A breach of this support range will cause some short term selloff in Nifty and then it could slide towards its major support zone of 11680 (50 -day SMA) and 11650. Only a decisive breach of 11650 levels will accelerate the fall and then it could slip further lower towards 11400 levels, to close the “Gap” area between 11420 and 11580. The “demand line” support of up sloping trend channel (Blue Channel) is also placed around 11400 levels.