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Below is the Weekly wrap up Nifty reclaims 18100 due to late recovery By Mr. Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking Ltd 

Overall the global cues were a bit favourable on Monday morning and hence after a long break, our markets opened with a decent upside gap to test 18000. However within few minutes of trade, all these gains just disappeared and in fact, we went on to slide below 17850. Market was not done with its twists and turns as we saw strong buying interest at lower levels to pull the market higher. The positive momentum gained some pace post the mid-session to surpass the morning high. This was followed by two days’ of consolidation in a small range. On the weekly expiry day, we had a soft opening on the back of some nervousness seen in major global peers. In fact in the initial hour itself, the weakness extended in some of the heavyweight pockets. This led to breach of 17900 first and then after a decent consolidation, Nifty went on to even test the 17800 mark. At the stroke of the penultimate hour, the expiry factor started playing out and this time it fortunately favoured the bulls as we witnessed a smart recovery towards the end to trim some portion of losses.

This was followed by a complete opposite action on Friday as we witnessed a gap up opening first and then due to sustained buying in some of the heavyweights, Nifty went on to reclaim the 18100 mark at the close. Market seems to have trapped in a range and this week although point wise we gyrated within 300 points, it’s hardly one and half a percent range for the Nifty. So we would rather call it a consolidation in the range of 17800 – 18100. For the coming week, 18200 – 18350 is to be seen as a crucial range and till the time we do not surpass it convincingly, we are not completely out of the woods yet. In fact, it would be too early to comment on it; but we can clearly see a bearish formation of ‘Head and Shoulder’ being in process on the daily chart of Nifty. The neckline support is around 17700 – 17600, which if gets broken, we could see difficult days for market in the short run. With reference to our recent cautious stance on the market, we will not be surprised to see it happening soon, if we fail to go beyond the mentioned zone of 18200 – 18350 in the forthcoming week.

The main reason for us to continue with the cautious stance is the formation of ‘Shooting Star’ pattern on monthly chart. As long as we do not break the high of the candle, it can prove its significance anytime. Hence, we reiterate on avoiding aggressive longs and even if one wants to follow stock specific moves, needs to be very selective.

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