WEEKLY RESISTANCE FOR NIFTY: 18000, 18200, 18300
PIVOT POINT: 17800
WEEKLY SUPPORT FOR NIFTY: 17600, 17400, 17200
Last week’s corrective move was followed by a decent gap up opening to kick-start the festive week on a cheerful note on 1 November 2021 . In the initial hour, market gave up some gains but fortunately at lower levels, the strong buying emerged across the broader market. In fact as the day progressed, the buying momentum accelerated to reclaim the 17900 mark. Eventually, Nifty ended the session with nearly one and half a percent gains. Our benchmark index had a gap up opening on Tuesday 2 November 2021 with a small margin despite SGX was indicating a sluggish start. In the initial trade, Nifty tested the 18000 mark but was unable to sustain above it. Due to modest selling in some of the heavyweights, Nifty gradually corrected in the first half and then slipped into a consolidation mode to end the range bound session with nearly two tenths of a percent cut.
NIFTY: A STRONG SUPPORT WILL BE @ 17600; STRONG RESISTANCE LEVEL SEEN @ 18200
The Diwali festival is around the corner and it appears as if the market is in no hurry to give any major move ahead of it. Generally markets do not correct around this festive time, but since we had a rough week last week and slid below key support of 18100 – 18000, market is finding a bit difficult to stay at higher levels. Fortunately the banking space remained firm throughout the day, which provided some helping hand to the benchmark index. If that had not the case, Nifty would have probably knocked the doors at 17700. For the coming week, 18050 – 18200 are likely to act as immediate hurdles and on the lower side, 17700 – 17500 are to be seen as key supports.
TECHNICALLY SPEAKING
Due to this week’s correction, the bears have finally managed to apply brakes on the ongoing euphoria. Since last week or so, Nifty started to look a bit nervous but banking was providing a strong helping hand and hence we did not see any major damage in benchmark. But now, the financial space finally succumbed to the broader market weakness by tumbling over 3%. This imposed tremendous pressure on Nifty and in the process, Nifty had to finally surrender the sheet anchor support of 18000. In fact, due to aggrandized selling, it just hastened towards the next key support of 17600. Since last few days, we have been maintaining our cautious stance on the market and even though market was making new highs, we maintained our scepticism and repeatedly advised booking profits. When market was not correcting, this might have sounded senseless, but historically its proven, when things look hunky-dory all around, the euphoric situation takes place and that is the time when market strikes back. This is exactly what we witnessed in last couple of weeks. Technically speaking, due to this late dominance from bears, we can observe few important developments on charts. Firstly, the ‘Lower Top Lower Bottom’ on daily chart after breaking below 18000, which coincided with the violation of the key short term moving average of ’20-day EMA’. More importantly, if we take a glance at the monthly chart, we can see a formation of ‘Shooting Star’ pattern, which certainly does not bode well for the bulls. Going ahead, since the market is a bit oversold, we may see some relief move in between; but traders should not get carried away by such rebounds. On the higher side, 18000 – 18100 would now be seen as immediate hurdles and any bounce back towards it, should be used to lighten up longs. On the flipside, we may see this corrective move extending towards 17450 first and if things worsened then the possibility of sliding towards 17200 – 17000 cannot be ruled out. We reiterate on staying light and avoiding any kind of bottom fishing for a while.
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