The Indian markets fell for the third straight session on Friday as FII continued to withdraw funds after the US Federal Reserve’s decision to raise interest rates. Most sectoral indices closed in the red with the Metal index being the worst performing index. The metal index closed down by 1.55 percent, followed by the FMCG index which closed down 0.76 percent for Friday’s session. Among the winners, the Auto index reported a mild gain of 0.3 percent.
Trading for the last week began with a gap down opening on Monday. However, the index was confined in a narrow range on the same day. Although, the bearish momentum did not continue, Nifty traded in a narrow range during the remaining part of the week. Overall, the index consolidated in a range of merely 108 points for the week, which is the narrowest trading range in the recent past. Considering week-on-week basis, Nifty shed nearly one-and-a-half percent from its previous closure.
This was clearly a week of consolidation for the markets despite the big global event (FOMC Meet), which eventually turned out to be a non-event as the outcome of 25 bps hike was pretty much on expected lines. However, due to last
week’s price action, key levels in the near term are clearly visible now to form a directional view. On the upside, 8220 – 8271 has become a stiff hurdle; whereas on the downside, 8121 – 8056 seems to be a strong support zone.
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Now technically speaking, “since the ‘Higher Top Higher Bottom’ on daily chart is still intact, we would continue with our optimistic view until recent swing low of 8056 remains unbroken. Further, considering the ‘Dragonfly Doji’ pattern formed during the antepenultimate week, we would expect the index to extend this bounce back rally towards 8320–8380 levels,” says a weekly review report by Angel Broking.
At this juncture, traders are advised to stay on the long side by keeping a strict exit point below 8056 and now it would be a prudent strategy to focus more on individual stocks, which may provide better trading opportunities, it says.