Weekly Market Recap

This week market started off on a positive note, followed by alternate days of loss and gain, finally closed with no significant change as far as major indices are concerned. While bifurcation happened between NIFTY and SENSEX last week remained intact as SENSEX managed to closed above its previous peak whereas NIFTY struggled and failed to broke above its previous peak.

In the week gone by the benchmark SENSEX closed up with a marginal gain of 158 points, or .39%, and NIFTY barely managed to closed in green with a gain of 17 points, or .15%, whereas BANKNIFTY outperformed the benchmark indices with a gain of 418 points, or 1.38%.

Current Outlook

The present configuration of the below 3 year’s weekly chart looks like a double top formation, but that hasn’t confirmed yet unless price close below significantly from current level. Nevertheless, we cannot ignore the configuration provided selling pressure witnessed on Friday was emphatic as weekly gain was nullified by one-day fall.

However, on daily chart below we can easily find out that NIFTY hasn’t touch it previous peak, not only that the indicators in below panel also suggest over-bought condition and they are also appearing to be turning down. If NIFTY turned around from here it would become a case of lower high, consequently may act as a significant top in near future. Moreover, the angle of escalation from 11100 to 12000 looks vertical which is quite vulnerable in nature and difficult to sustain.

Hence, outlook is still ambiguous, for bulls NIFTY has to close above its previous peak and the same breakout zone should act as support to get the confirmation, and for bears NIFTY has halted rightly under the previous peak and may act as a strong resistance.

Conclusion

No doubt, so far we have seen a stupendous rally, but the sustainability is becoming a bigger question with each passing day. The indicators on daily chart are showing a sign of over-bought condition, while on weekly charts there is negative divergence. The situation is not precarious, but quite doubtful for the bulls, hence stay alert.

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Keep Analysing..! Be a Savvy Investor..!!

Pankaj