Nifty is trading comfortably above its flattening 100-DMA, suggesting that it could enter into a period of consolidation after four weeks of bullish movement. A detailed study of the daily chart suggests that a smaller trading range between 5,015 and 5,150 has been formed in the last five days.
As evident in the chart below, the Nifty is yet to cross the resistance line. In the past, the 5180-5192 zone has acted as a stiff resistance for the Nifty (as shown in the chart). Since October 2009, on multiple occasions, the Nifty attempted to cross the resistance zone. These are the same levels from where it broke out in early-January 2010, leading to a 2010 peak of 5,311. The past has seen very heavy trading between 5,150-5,190, which means it will need volume expansion to breakout and establish a trend. With volumes missing for the time being, a clear direction cannot be established.
Sluggish momentum indicators and a flattening moving average suggest a range-bound trading phase for the Nifty. A break-out past 5,190, would confirm a strong intermediate trend.