The domestic equity market had a better-than-expected week. Despite a bout of consolidation in the initial days, the benchmark Nifty50 ended the week on a buoyant note, putting on net gains of 184 points or 2.02 per cent on a weekly basis.
On the expected lines, select outperformance was seen from Midcap and banks, and some consolidation was seen on the auto counter. In the coming week, the picture will get clearer.
There are signs of consolidation on the daily charts and virtually no sign of any reversal in the primary uptrend was seen on the daily or weekly charts. This translates into buoyant outlook for the coming week.
We can expect fierce consolidation with some volatility given the overbought nature of the market, but no significant downside is expected.
The 9,360 and 9,450 levels will act as resistance in the coming week while supports will come in at 9,220 and 9,150 levels.
The weekly RSI stood at 70.0947 and it was a bullish signal as it marked a fresh 14-period high, though it is mildly overbought. The weekly MACD continued to remain bullish as it traded above its signal line.
All and all, it is extremely important to note that though we may continue to see intermittent bouts of profit taking given the multiple pattern resistances that the market may encounter, there are no signs of reversal of the primary uptrend. We may also see some volatility creeping in over next week.
However, all corrective actions should be utilised to make fresh purchases. The 45% wider-than-normal bands may not allow a runaway rise in the Nifty50, but the inherent structure of the market remains buoyant.
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