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 week, the benchmark indices corrected sharply, with the Nifty ending 4.7 percent lower, while the Sensex was down by 4100 points. Among sectors, the Pharma index outperformed, rallying over 1.5 percent, whereas the Metal and Bank Nifty indices corrected sharply, shed over 5 percent. During the week, the market slipped below the 20-day and 50-day Simple Moving Averages (SMA), and post-breakdown, selling pressure intensified.
Technically, the weekly charts have formed a long bearish candle, and after a long time, the Nifty closed below the 200-day SMA, which is largely negative. We believe that as long as the Nifty remains below the 200-day SMA or 23800/78300, weak sentiment is likely to continue. Below this level, the market could slip to 23400-23200/77500-77000. On the other hand, if it rises above 23800/78300, the pullback formation is likely to continue up to 24000/80000. Further upside may also occur, potentially lifting the market up to 24200/80600.
For the Bank Nifty, on the lower side, 50500 or the 200-day SMA would act as a crucial support zone. If it sustains below this level, it could slip to 50300-49800. Conversely, if it breaks above 51200, it could bounce back to 51800-52200. Short-term traders should remain cautious and selective, as there is a risk of being trapped at lower levels.
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