The Nifty index ended the consolidation phase with a gap up opening on Tuesday last week as the market participants commemorated the massive victory by BJP in the UP elections. The Nifty gained 1.5 percent on Tuesday which was followed by a positive momentum for next couple of sessions. Tracking positive global cues, the Nifty index opened with another upside gap on Friday. However, post opening, the stock-specific profit booking was witnessed which led the market breadth marginally in favour of the declines. On weekly basis, the Nifty index posted reasonable gains of 2.52 percent over its previous week’s close.
Finally, the much-awaited breakout beyond the 9000 mark is a reality now and it has happened with a huge gap after the BJP’s thumping victory in UP assembly elections. “Looking at the past few weeks’ price action, it appeared as if the market had already discounted the BJP’s win, but it will happen with such a huge margin was a pleasant surprise and hence, we saw such delightful reaction from the market. This was then supported by a decent correction in US dollar index post the announcement of rate hike by US Fed in the midst of the week,” says Angel Broking.
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“Our persistent bullish stance on the market since last couple of months has played out well for us. Looking at the sturdy technical structure of the market supported by various indicators, we anticipated this move and have participated heavily in it,” it says.
Due to this week’s spectacular move, the Nifty has met with our initial target of 9200. However, the market saw some decent profit taking after testing this level on Friday, which dragged the index well below 9200 at the close. Despite this, the weekly chart still looks strong and considering the rising ‘RSI-Smoothened’ level above the 70 mark, Angel Broking continues to remain upbeat with a directional view on the market.
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Keeping all these things in view, Angel Broking believes that the Nifty may head towards 9400 – 9600 (price extension of previous up move from recent low of 7893.80) over the next few weeks. “Having said that, in between some consolidation or a profit booking (like we saw on Friday) by momentum traders cannot be ruled out. On the lower side, 9100 – 9050 levels would provide a strong support in the forthcoming week. Traders are advised to keep using such dips to create fresh longs in the market,” it says.