Below is quote on Market Wrap Up - Market remains in a range, month ends tad below 15800 by Mr. Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking Ltd
The recent trend continues as we once again had rough global cues to start the expiry week on a sluggish note on Monday. During the subsequent two sessions, the selloff aggravated globally which clearly had the rub off effect on our markets. The benchmark index first breached the 15700 mark and then due to aggravated selling, went on to breach key supports one after another. At one point, things looked extremely bleak when Nifty was flirting with key support of 15500. Fortunately, the mighty bulls grabbed this opportunity with both hands; resulted in a v-shaped recovery thereafter to reclaim 15700 at the close on Wednesday itself. During the remaining part of the week, markets remained in a slender range by maintaining mild positivity.
It’s been more than a month and half now, the boredom continues in our market. It can easily be seen if we compare the vis-a-vis performance. In fact, if we take a glance at the intra-month movement as well, we can see Nifty trapped in a slender range of 500 points. Today being the monthly close, the monthly chart now exhibits two back to back ‘Doji’ candles with very small upper and lower shadows. This is clearly a sign of consolidation and market seems unsure of this direction. In such scenarios, one should avoid taking any directional view till the time we do not get a range breakout on either side. Considering the historical trend, ‘August’ month is known for bigger moves. So it would certainly be interesting to see whether ‘History repeats itself’ or not and if this happens then which direction market decided to move in. As far as levels are concerned, 15850 followed by 15950 are the levels to watch out for and on the flip side, the sacrosanct support is placed at 15550 – 15450.
If breakout takes place in the northward direction then we may not see bigger move; but if it happens downwards, then brace yourself for some tough time. In last fifteen months, market has not experienced any meaningful correction and has been enjoying a strong Bull Run. So once we see convincing breakdown below 15450, the possibility of some decent correction thereafter increases. By highlighting these scenarios, we are not trying to create any negativity, rather it would be very handy to know the repercussion of certain developments in advance. Meanwhile, till the time we are stuck in a range, one should take one step a time and continue with stock specific approach by following proper exit strategy.
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