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Interference & Expectations
* After the hiccup seen in the previous week, the bulls are now back showing their supremacy. Initially, all went well in Monday's session as Nifty spot witnessed support around 38.2% retracement support of its previous rally and bounced back sharply in the next few sessions to meet the resistance level of 10740 - 10780 levels. Then we witnessed a gap up opening above the resistance zone on Thursday and eventually extended the gains to end with 3.32% against previous week at 10877.
* The index had seen a sharp fall from the levels of 11760 to 10004 in the month of September and October; however, the month of November has been buoyant as we have retraced 50% of the above fall. Now we have entered into a new month with some bullish evidence that supports further extension of the current up move.
* Index, in the process, has now broken above previous swing high and thus created some BULLISH intercuts, thus giving RISE to a good BASE formation. In addition to the positive placement of moving averages and oscillators, we sense the Index is likely to retest 11100 and then 11385 levels.
* However, since we are now entering the month of political events the volatility is likely to increase. In such scenario dip towards 10770-10740 should be used as buying opportunity whereas rally around 11100-11300 can be taken as profit booking levels. The stop for all these LONGS remain attached at 10440.
* Since the volatility is likely to increase the preferred choice would be to stick with the heavyweight counters as midcap & small cap are clearly underperforming and theres still no sign of REAL strength.
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