Weekly Market Recap

In my previous weekly note, I had mentioned that technical configurations are weak and  I was expecting market to come down. In line with my analysis, market remained weak throughout this week except for one day sharp bounce on Thursday, that too on the back of weekly expiry day. Finally, week ended on negative note.

In the week that gone by the headline index SENSEX was down by 407 points, or .103% and closed at 39194, similarly, NIFTY lost 107 points, or .91% to settled at 11724.

Current outlook

On the daily chart of NIFTY depicted below we can see price is taking a gap support, the gap which was formed after an exit poll and on Thursday it bounced-off sharply precisely at the same level, however, I think that bounce was the attribute of the weekly option expiry as on next day NIFTY shed off 70% of that bounce. The positivity on this chart is that NIFTY is still holding the gap support along with heavy weight large cap stocks as they are also demonstrating a same configuration. Like I said in my last two blogs, there was a tough fight between demand and supply at 12K mark, and now we are seeing a  same situation at gap support. Unless, gap support is hold biased would be in favour of bulls, but all the technical indicators are negatively placed.. After breaking below gap support, the next support on NIFTY could be at 11400 and 11100, but we need to be watchful unless it happens.

On weekly chart my double-top formation post false break-out has gained relevance again after being jeopardize for one week. I think there was an exhaustion buying climax on Thursday on the way downward, if that’s the case we should see lower level in NIFTY next week. On positive side, consumer discretionary stocks have shown strength, but they don’t have much weightage to hold the benchmark indices. Hence, outlook is cautiously negative.

Conclusion

As I stated, the market has some technical problems, both in short term and weekly chart. The trick will be for the market to pull back and clear the short-term issues that will eventually improve the longer-term picture. A pullback is not assured, but that is what I’ll be looking for next week.

I welcome any feedback or suggestion you may have about the content of this article.  

Keep Exploring..!; Be a SAVVY Investor..!!

Pankaj