The benchmark index Nifty began the trading of the week on a pessimistic note on Monday. In the process, the Nifty sneaked below the November low and eventually ended the session to post a new seven-month low.
The benchmark index Nifty began the trading of the week on a pessimistic note on Monday. In the process, the Nifty sneaked below the November low and eventually ended the session to post a new seven-month low. However, the bulls came back quite strongly in the opening trades on Tuesday and continued their intraday rally for the remaining part of the day.
In fact, due to immense interest in the follow-up buying, the market witnessed a v-shaped recovery throughout the week. The Nifty ended the week at its high point at 8185.80, gaining 2.40 percent on weekly basis, led by the FMCG index (+5.93 %) and the IT index (+3.26%). The Sensex, on the other hand, closed the day 260.31 points up at 26626.46.
It was a remarkable week for traders (especially bulls) as the Nifty not only saw respite after a decent corrective move but also a stupendous recovery after posting a low of 7893.80 on Monday. More importantly, this bounce back looked robust as we witnessed a strong buying interest across the broader market.
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“It is quite evident that our recent strategy to hunt for buying opportunities in dips has worked well for us. Technically speaking, we were seeing 7900 as a major support for the Nifty as it coincided with recent lows as well as 50% Fibonacci retracement level of the entire rally from 6825.80 to 8968.70. Now, due to the recent recovery, this support has become sacrosanct level for the index. During the week, we expected the Nifty to bounce back towards 8100, but Friday’s move has confirmed a key price development on monthly chart. We can now observe a ‘Bullish Hammer’ on monthly chart along with prices closing above the ‘20 EMA’ level of 8137,” said Angel Broking in a report.
This has provided a conviction of breaking the recent swing high of 8274.95 quite soon. In this scenario, the Nifty may extend the rally towards 8400–8460 levels. On the flipside, 8100–8020 would be seen strong support zone in the forthcoming week. To summarize, “traders should continue to remain optimistic on the market and focus more on individual stocks in order to find potential trades,” Angel Broking said.