INSUBCONTINENT EXCLUSIVE:
Markets continued its surge on Friday as well
Despite gaining nearly 190-odd points from the previous two sessions, the benchmark Nifty50 ended the week flat
The Nifty closed the week gaining 8.75 points, or 0.08 per cent, on a weekly basis.
The week that has gone by has remained quite volatile,
The index saw itself swinging back and forth in a wide range, with volatility accompanying it.
As we step into the coming week, we will also
face expiry of the current derivative series
Speaking on broad terms, with the Nifty forming a lower top after 11,100 levels at 10,930, we still rule below this area
There is all likelihood of volatility refusing to go away and we will see the markets trading in a bit wider range with good amount of
volatility ingrained in the sessions to come.
The resistance points for the coming week are expected to come in at 10,735 and 10,850
Supports are expected to come in at 10,485 and 10,390 zones.
The Relative Strength Index (RSI) on the Weekly Chart is 55.45 and it remains
neutral, showing no divergence against the price
Daily MACD stays bullish while trading above its signal line
On the Candles, a Candle with long lower shadow occurred
Since this holds importance only when it occurs during a downtrend, it has no significance in the current context.
While having a look at
pattern analysis, the Nifty continues to remain in the 27-month long upward rising channel
Also, the Moving Averages remain in order, with each smaller one trading above the larger
It remains to be noted that with the RSI remaining neutral, it too has formed a lower top for itself, as evident from the charts.
Overall,
in any given scenario wherein the Nifty might see the continuation of the pullback, the upsides are likely to remain capped from now on in
Once the Nifty approaches these levels, we will have to deal with that formation with a great amount of caution
We expect that the Nifty might continue to move up, but at the same time might encounter profit taking at higher levels as well
We now recommend protecting positions at each higher level
The coming week and weeks after that will give rewards much on the basis of effective stock selection and sector rotation that will be
done.
A study of Relative Rotation Graphs shows that in the coming week, the Financial Services pack along with FMCG is set to relatively
Though the IT pack did see some moves, it has continued to steadily lose momentum and is likely to continue to slow down and lose momentum
Along with this, we will see some relative improvement in momentum in the bank Nifty pack
We are also likely to see
metals and PSU banks continuing with their trajectory to improve in relative momentum
We do not see any notable performance coming from realty, infra, auto and other broader indices
In the above Chart, they show relative performance as against the Nifty Index and should not be used directly as buy or sell signals.
(Milan
Vaishnav, CMT, MSTA, is Consultant Technical Analyst at Gemstone Equity Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
