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

We started off strongly on Monday and it appeared as if the market is going to make one more attempt towards 20000. However, when things are least expected, the market tends to surprise us and unfortunately mostly in an unpleasant manner. On Monday, late in the evening, one of the reputed credit agencies ‘FITCH’ downgraded US credit ratings to AA+ which dented the recent positivity across the globe. We too succumbed to this global sell off and skidded like a bottomless pit in the first half of Wednesday as well as Thursday’s session. However, fortunately the oversold market rebounded from key supports on the last trading session of the week; courtesy to some cool off in the US bourses. Eventually, the week ended with restricted losses of nearly seven-tenths of a percent from the previous weekly close.

The action-packed week ended with some respite as Nifty managed to reclaim the 19500 mark. The recovery was initially led by IT counters but later, the most affected space BFSI took it forward to bring some smile back among the market participants. Mind you, we are still not completely out of the woods yet. Technically speaking, the Nifty slipped and closed below the ’20-day EMA’ for the first time since March 31, 2023, and we are placed slightly below this. So, till the time, Nifty does not surpass 19550 – 19600 on a closing basis, one should avoid being complacent and ideally, it’s better to avoid aggressive trades. In case of further global aberration, the Nifty may go back to challenge 19400 – 19300 levels and a move below this would reinforce the selling pressure to slide towards the next important cluster of 19000 – 18800. As far as optimistic scenario is concerned, a move beyond 19600 is crucial with global things needing to subside completely. At the end of the week, the market has left us with some ambiguity and hence, it’s advisable to take one step at a time. Hopefully, the running correction is not extended further, and we may again go back to reach the magical figure of 20000 in the near term.

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