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Daily Market Wrap Up By Mr. Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One Ltd.

Our market started the truncated week on a flat note taking cues from the muted global markets, but soon after, the momentum accelerated led by a rally in the heavyweights, and the Nifty reclaimed the 17500 mark. As the week progressed, our markets also extended their rally, which was generally due to the improvement in the global markets and the positive contribution of the FIIs. However, the follow-up buying interest was missing for the entire week, showcasing the tentativeness among the market participants at the higher levels. Eventually, the benchmark index continued its winning streak for the fourth consecutive week and ended the session a tad below 17700 by procuring over 1.73 percent to the previous week’s close.

Technically speaking, the winning streak in the index has brought it towards the sloping trendline on the weekly chart, which might be considered as the major hurdle for the index in the near period. Also, the recent upward move has been vertical in nature, so one should not rule out the possibility of profit booking at the critical resistance zone. And any sort of correction in the upcoming week should be considered healthy post such a strong rally, as structurally, we may get a higher bottom. The undertone is likely to remain strongly bullish, and any dip towards the consolidation zone of 17150-17400 could be seen as an opportunity to add new longs in the index from a directional point of view. As far as levels are concerned, 17780-17800 is the crucial supply zone, and any decisive breach above the same could only trigger the next set of rallies in the index.

Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the strategy to follow one step at a time and respect levels on either side. The favorable global scenario was one of the major catalysts for the entire bull run in the week; hence, one should stay abreast with global developments and the key domestic macro data. Also, one can continue to focus on individual stocks as the thematic moves are still playing out well in the market.

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