Outlook bullish for cement stocks
- Low volume environment continues after the RBI event day as the market further contracts within the previous day’s range making it an Inside Day.
Low volume environment continues after the RBI event day as the market further contracts within the previous day's range making it an Inside Day. Inside day represents contraction in the range of the market and indicates the mean reverting nature of volatility.
The market has been in a very sideways or rather stiff range for the past couple of days which is turning into heaven for nondirectional options players. On the upside, the resistance is capped at 18,060, which is coupled with event-based high and trendline resistance.
On the downside, we believe the momentum can be seen coming in at 17,600 – 17,550 levels, which are a crucial support. A break of this range can further fuel the momentum in a directional leg. A positive crossover is seen hence a bullish bias is in effect in the short term trend while on a lower timeframe sideways price action is seen.
So any dip towards support mentioned should be utilised by bull unless we see a change in the short-term trend, which is bullish. We continue to stay bullish on cement stocks, which are outperforming for the past couple of days.
(The author is Technical Analyst at Finversify)