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Below is on Weekly Wrap Up By Mr. Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One Ltd.

After an extended weekend, we started the week on a pleasant note owing to smart rally in US markets on previous Friday. In the initial trades, we extended the move to challenge the 18200 mark. However, due to lack of conviction at higher levels, Nifty slipped into a consolidation first and a tiny bit profit booking was witnessed in the latter half to restrict gains. On the following day, market looked a bit tentative ahead of US Fed policy; however, on Thursday, the buying momentum accelerated throughout the session. As a result, the Nifty managed to surpass the sturdy wall of 18200 with some authority. Everything looked hunky dory but post market developments with respect to HDFC Twins, dented the market sentiments. These heavyweights opened significantly lower and extended losses in the latter half to drag Nifty below 18100 on a closing basis.

The weekly expiry panned out extremely well for our domestic participants as we not only outperformed global peers but also went on to surpass the strong hurdles around 18200. The charioteer of this massive short-covering rally was the entire BFSI sector, which eventually turned out to be a spoilsport as it poured complete water on weekly gains. With massive sell off in these bellwether stocks, the banking and NBFC stocks started tumbling in tandem. The benchmark index Nifty still managed to fall lesser (1%), the real turmoil was in other indices like BANKNIFTY and FINNIFTY as they plunged more than 2% on Friday. Now taking a glance at the weekly chart, we can see ‘Doji’ formation in NIFTY and ‘Dark Cloud Cover’ in BANKNIFTY. Both these candlestick patterns indicate halt or reversal in the ongoing trend. If things worsened with respect to banking conglomerates, we may see some more profit booking in the forthcoming week. However, we are of the opinion that if there is no aberration globally, we may see buying resuming at key supports. As far as levels are concerned, 18000 followed by 17900 are to be seen as key supports, whereas on the flipside, the sturdy wall once again stands at 18150 – 18250. It would be interesting to see how things shape up in the first of the week. Meanwhile, traders should continue with a stock centric approach and should use declines to add longs with a near term perspective.

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