WEEKLY RESISTANCE FOR NIFTY:
11400, 11500, 11600
PIVOT
POINT: 11250
WEEKLY
SUPPORT FOR NIFTY: 11150, 11050, 11000
WEEKLY CHART FOR NIFTY
DAILY RESISTANCE FOR NIFTY: 11375, 11435, 11500
PIVOT POINT: 11275
DAILY SUPPORT FOR NIFTY: 11225, 11175, 11050
DAILY CHART FOR NIFTY
If end’s well it mean all is well. Finally nifty closed the week above 11300
mark. The market mood has been somber from last Diwali 2018, thanks to economic
slowdown, subdued earnings, liquidity crisis, asset quality concerns, FII
outflow, corporate governance issues (in a few cases) global growth fears amid
endless US-China trade tensions etc, which clearly reflected in markets. Diwali
2019 is still two-week away. The Nifty Midcap and Smallcap indices fell
11 percent and 14 percent respectively in Diwali 2019 (against 7% and 22% correction
in Diwali 2018), but the picture was completely different in benchmark indices.
The Nifty and Sensex rallied 6% each (against 4.5% and 10% gains respectively
in Diwali 2018) led by hope rally and buying in select bluechips. On Monday,
Nifty started the week on a mild positive note however the rub-off effect from
the previous week immediately pulled Index lower. Subsequently, Index managed
to hold on to the key support levels to trigger an intraday bounce back.
Eventually in the penultimate hour nifty once again witnessed a sell-off to end
with a loss of 0.43% at 11126. After the mid-week holiday, the Nifty started Wednesday’s
session marginally positive. However, it witnessed some selling pressure in the
first hour of the trade and tested the crucial support of 11100. The indices
then witnessed buying momentum from this support and the momentum accelerated
as the day progressed to end with gains of over 180 points. Citing negative
cues from the Nifty, our indices opened marginally negative in Thursday’s
session. The Nifty then traded in the range of 11200-11300 throughout the day
and ended with a loss of seven-tenths of a percent.
NIFTY:
A STRONG SUPPORT WILL BE @ 11000; STRONG RESISTANCE LEVEL SEEN @11500
The Nifty tested the support of 11100 in Wednesday’s
session. As mentioned in our weekly report, this was the last ray of hope post
the recent sell-off as there was confluence of supports around this level. This
previous breakout zone around 11100 coincided with the 50 days moving average
and 200 SMA on the hourly chart. The market participants took this as an
opportunity which resulted in a broad based buying. Also, many of the index
heavyweights participated in this move which is certainly a positive sign. Wednesday’s
low of 11090 now becomes a support base as a higher bottom can be clearly seen
on the chart. Going ahead, We expect the index to continue the momentum and
till this support is intact, traders should look for buying opportunities for
good returns in short to medium term. On the higher side, 11450 would be
initial resistance to watch out and a breakout above the same would then
provide a confirmation of resumption of the uptrend and the index could then
approach 11550-11600 range very soon.
TECHNICALLY SPEAKING.
On the weekly chart, Index for the 2nd
consecutive week ended in red and is now approaching the key levels at 11200-11100
which is a confluence zone formed by previous bullish breakout level and 61.8%
retracement level of the recent sharp upmove (10670-11695). Going ahead, it
will be crucial how Index reacts around these crucial levels as a break below
the same can open doors for further weakness testing levels below 11000 mark.
On the flip side, previous support around 11400 can now act as an immediate
resistance. We are hopeful of an upmove in near term and hence, traders are
advised to look for buying opportunities with a stoploss placed below the swing
low of 11100. On the higher side, the immediate resistance for the index is
seen around 11400-11500 and a move above the same could then lead to a
directional upmove going ahead. The effect of measures is always seen with a
lag, hence considering the slowdown and its impact, the market seems to have
priced in and may be gradually preparing for next up move especially after
government move. We believe the market has already discounted and priced in the
economic downturn, and we are at the end of the cyclical downturn trajectory.
Tax benefits for newcomers will also attract new entrepreneurs and this may
help the small and mid-cap sector to pick up the expected growth. We
feel the period between Diwali 2019 and Diwali 2020 could be an exciting phase
for the markets, expecting the market to return 15-25 percent and mid-smallcaps
to outperform largecaps if demand improves in current festive season.
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