Weekly Market Wrap : In the last week, the benchmark indices bounced back sharply by Amol Athawale, VP-Technical Research, Kotak Securities
Below the weekly Market Wrap by Shrikant Chouhan, Head Equity Research, Kotak Securities
In the last week, the benchmark indices bounced back sharply. The Nifty ended 1.74 percent, whereas the Sensex was up over 1300 points. Among sectors, the Realty index outperformed, rallying over 11 percent, whereas the Capital Market and IT indices lost the most, with the Capital Market index shed 5 percent and the IT index down by 3.25 percent. During the week, the market slipped below 23,000/75500 but, due to oversold conditions, it bounced back sharply. After forming a promising reversal pattern, the market held its positive momentum throughout the week. Technically, on weekly charts, it has formed a long bullish candle and is currently trading comfortably above its 20-day Simple Moving Average (SMA), which is largely positive.
We are of the view that the short-term market texture is bullish, but due to temporary overbought conditions, we could see range-bound action in the near future. For traders, the 20-day SMA or 23,270/77000 and 23,100/76500 would act as key support zones, while the 50-day SMA or 23,810 /78500 and 23,900/78800 could be the key resistance areas for the bulls. For Bank Nifty, as long as it is trading above its 20-day SMA or 49,000, the bullish formation is likely to continue. On the higher side, 50,250 and 50,500 would be the key resistance zones for the traders.
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