Below are Views On Nifty at 15800 but midcap index at crucial juncture now By by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking)
“The new trading week started on a pleasant note on Monday as there was some positivity seen across the globe. With this, our benchmark registered a fresh record high while the banking remained quiet on the first day. During the remaining part of the week, Nifty consolidated in a small range as the banking kept sulking. Fortunately, the IT space saw some renewed buying interest which kept our benchmark in the positive terrain to eventually register yet another record high beyond the 15800 mark. Among the key indices, Nifty gained 0.82% during the week which was mainly led by handsome gains of 4.52% in Nifty IT. The Nifty Midcap 50 index too added another 2.57% to its kitty; however, the banking remained laggard by losing over half a percent.
Since we are trading in an uncharted territory, a small uptick from hereon would give us new high. Hence, it should be considered only as a number now. Since last couple of weeks, we have been mentioning how there is no major hurdle seen before 16000 and in line with this, the Nifty has been continuing its rally. But the kind of price action we witnessed during the week (especially in banking space), it’s not giving us the comfort now. Hence, if benchmark has to reach this milestone of 16000 and even move beyond it, the BANKNIFTY needs to surpass the sturdy wall of 36000. If it fails to do so then we may see some bouts of profit booking in the forthcoming week. The key support is to be seen at 15700 – 15550 for Nifty; whereas 15850 – 15900 are to be considered as immediate resistances.
There is another notable observation that is making us a bit cautious at current levels. The Nifty Midcap 50 index which is enjoying its dream run since many months has now reached a crucial juncture. On the daily chart, we can see it reaching the ‘100% Price Extension’ of the previous up move and importantly on the weekly time frame, we can see it coinciding around the ‘161% Price Extension’ of the first up leg started after March 2020 lows. By highlighting this, we do not expect the multi-year Bull Run to end; but at least a short term pause or profit booking cannot be ruled out. Hence traders are now advised to take some money off the table and avoid aggressive bets overnight. Also, the stock specific approach still can be continued but one has to be very fussy and should follow proper risk management from hereon.”
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