Nifty enters crucial support zone of 5800-5840 level - Religare

For fourth consecutive week, index closed in red and entered in the crucial support zone of 5800–5840 level. It closed down by more than half a percent on weekly basis with major draggers from Metal, Capital goods and Banking pack.

Technically, it has formed inverted hammer on the weekly chart which indicates pause in the declining trend so it might see some bounce to sideways trend in the week to come. On the other hand, India VIX is continuously rising adding to the negativity but it has now approached the crucial hurdle around 17-17.50 zone which may result in pause in further advance; hence some breather in equity space.

Though global markets have started losing momentum which indeed is an important reason to worry but due to the impending domestic events of Rail and Union budget in the coming week; we might not see any major influ-ence from that front. Importantly, stock specific move would be erratic in the coming week so it's advisable to avoid overleveraged positions.

Source : Equity Bulls

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