Weekly Market Recap
It was quite a volatile week for the market. After a truncated last week, NIFTY started off strongly on a positive note, but the upside momentum got reversed the next day and NIFTY continued to slip till Thursday. However, the sharp rebound occurred on Friday that took the NIFTY at the higher end of the range and finished the week with a decent gain.
In the week gone by the benchmark, SENSEX added 619 points, or 1.03% to settle at 60686, similarly, NIFTY gained 273 points, or 1.53% to close above the 18K mark at 18103. While BANKNIFTY remained sluggish no rebound is being witnessed and closed at the lower end of the range with a loss of 1.7%.
Current Outlook
It is quite apparent in the chart that NIFTY once again took the support at 50-day SMA (green line) which I have been discussing recently. In addition, the indicators below also appear to be rolling up which were falling until last week. The current setup appears to be bullish that may lead the price higher at least up to the previous high. However, there is a high probability that the market may remain sideways as breadth is not looking quite strong for the lopsided gain. Moreover, the banking stocks which led to the recent decline remained sluggish and may continue to weigh down the NIFTY in the short term. Although, IT remains the strongest sector followed by infra, metal, cement, and oil& gas. The upside momentum is still quite evident in these sectors and may continue to contribute to the indices.
On the flip side, I am still concerned about the weekly chart which is not providing enough confidence to go long at the current level rather it looks quite vulnerable to me. The echo of inflation is being heard globally whose reflection is being seen recently in the rising gold price. The gold has given a solid break-out this week from the falling wedge which is quite bullish in nature. If inflation is the reason for this break-out, then I think this might be the cause of concern for equity.
The combining different time frame may depict an ambiguous picture, but so far, the 50-day SMA support is being respected tenaciously, and until that support hold the outlook favors the bulls.
Conclusion
The chart gives us an idea of support and resistance where the price might go, based upon where it has already been. It is most likely that the price may remain sideways between the recent low and high, meanwhile, we should be patient and prepared for any decisive move on either side.
Feedback, comments, suggestion, or questions are welcome in the below comment section or at [email protected].
Be Patient; Be a Savvy Investor..!!
Pankaj