Many stocks are not offering good setups or good trades from last few weeks; most of the Stocks listed in NSE and BSE futures struck in a narrow range. Price action and structure of Reliance capital reflects the current conditions clearly.
Decreasing Market participation rate and decline in volatility is the primary reason behind. Though it’s the case, there are some exceptions! This trading environment is more favorable for mean reversion and range traders. It seems like Trends are fading away or At least terminated for a while.
Shares trended from Jan 2017 to May 2017 correlated with performance of Nifty50. As prices made higher highs, it supported good momentum and improving fundamentals. Institutional holdings also increased along with improving trend and results.
During the period of May – June 2017, Market tested 700.00 and strong selloff ensured. The selloff coincided with Negative fundamental report and reduced institutional holdings. As a result, Market conditions changed from trend to Range. Eventually Price action formed structural support at 540.00 and structural resistance at 690.00.
Now the price is trading near the structural resistance zone around 690-700. Will the resistance stop the bulls or will the bulls break through it? This stock can offer some potential trading setup in coming days. Traders should focus on the Price action near Resistance zone. Watch and trade it !
