Quote on Weekly Market Wrap by Amol Athawale, VP-Technical Research, Kotak Securities
Below the Quote on Weekly Market Wrap by Amol Athawale, VP-Technical Research, Kotak Securities
In the last truncated week, the benchmark indices experienced extremely volatile activity. After a rollercoaster of movement, the Nifty ends 0.33 percent lower, while the Sensex was down by 205 points. Among sectors, Real Estate, Metal, and IT indices corrected sharply, with Real Estate down by 4 percent, Metal by 2.9 percent, and IT by 2.3 percent. In contrast, the FMCG and Consumer indices outperformed, with both indices rallying over 3 percent.
During the week, the market opened with a significant gap down and slipped below 22,000/72700. However, due to buying interest at lower levels, there was a sharp rebound. Technically, on weekly charts, the index formed a long bullish candle, and on the daily chart, it exhibited a promising reversal formation, which is largely positive. However, the short-term texture of the market remains on the weak side.
We believe that the current market texture is extremely volatile and uncertain; therefore, level-based trading would be the ideal strategy for positional traders. In the near future, the 50-day and 20-day SMA (Simple Moving Average) or 23,000/75800 would act as crucial resistance zones. On the downside, retracement support is positioned at 22,500/74200. Technical setup indicates that as long as the market is trading above 22,500/74200, the pullback formation is likely to continue. On the higher side, if 23,000/75800 is breached, it could push the market toward 23,200/76400. Conversely, if it falls below 22,500/74200, market sentiment could shift negatively, and traders may prefer to exit their long positions.
For Bank Nifty, after a correction, it rebounded sharply and is currently trading near the 200-day SMA. For trend-following traders, the 200-day SMA, or levels around 51,000 and 50,500, would act as key support areas for the bulls. As long as it is trading above these levels, the bullish sentiment is likely to continue. On the upside, it could retest the range of 51,800-52,000. However, if it falls below 50,500, the chances of hitting 50,200-50,000 would increase.
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