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Below is on Weekly Wrap Up By Mr. Sameet Chavan, Head Research, Technical and Derivatives, Angel One Ltd

Trading for the week began with a downside gap on Monday and due to extended weakness in the financial space, Nifty went on to test 19300 on the same day. Fortunately, a sharp tail end recovery rescued our markets from the crucial support zone. A similar price action was replicated during the remainder of the week. However, with bears maintaining their dominance overall, we concluded the truncated week tad above 19300 by shedding nearly a percent from the previous weekly close.

Although, the correction has not been severe, the Nifty has marked negative close in last four consecutive weeks. The global headwinds and banking related concerns post the RBI policy are keeping our markets under pressure, whereas the inherent strength in other spaces is providing some support at lower levels. To summarize, key indices are stuck in a range and till we do not find any major trigger, the consolidation is likely to continue. If we take a meticulous glance at the hourly chart, we can see ‘Three-point Positive divergence’ in RSI-Smoothened oscillator. This development did trigger some smart recovery around the midsession; but due to lack of follow up, we saw few downticks towards the end. Nevertheless, the structure is still intact and hence, we will not be surprised to see some buying emerging at lower levels (provided there is no major global aberration). The first sign of revival would be confirmed once Nifty sustains above 19370 – 19400 levels, which may then push Nifty towards the next cluster of 19550 – 19650. On the flipside, 19250 is to be seen as a critical support; because a drift below this would result in a sharp correction towards the major support zone of 19100 – 19000 (which seems unlikely at this moment). Traders should refrain from complacent trades and continue with one step at a time approach.Dear All,

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