Lack of fresh bullish triggers in near term - Angel Broking

The week started off on a flat note, in-line with quiet trading mood across the globe. During the opening session of the week, the domestic bellwether indices traded with positive bias and closed well inside the positive territory. This was followed by a gap up opening on Tuesday's session, which pushed indices above last week's high of 19435 / 5925 and eventually beyond the psychological level of 6000 (Nifty) for the first time after February 4, 2013. The final trading session of the week traded with immense volatility post the announcement of the RBI monetary policy. However, it turned out to be a non-event as the RBI trimmed the benchmark repo rate by 25bp, in line with market expectations. After a volatile session, eventually, the markets ended in the negative territory, for the day.

The most beaten up sectors over the past few weeks like the IT and Teck contributed heavily in this week's rally along with the FMCG and Capital Goods; whereas the Banking counters remained under pressure throughout the week. The Sensex and the Nifty posted a decent gain of 1.50% and 1.24%, respectively, over the previous week's closing.

- The '20-week EMA' and the '20-day EMA' are placed at 19090/5784 and 19120/5801 levels, respectively.
- The '89-day EMA' and the '200-day SMA' are placed at 19105/5787 and 18750/5685, respectively.
- The weekly ADX (9) indicator and the 'RSI-Smoothened' oscillator have signaled a positive crossover.
- The 78.60%Fibonacci retracement levels of the fall from 20204/6112 to 18144/5477 is placed at 19762/5976.

For the third consecutive week, our benchmark indices have closed in the positive territory. During the week, indices managed to sneak beyond the 78.60% Fibonacci retracement level of 19762 / 5976. This has negated the 'Lower Top Lower Bottom' formation seen in the weekly chart. However, indices have registered a weekly closing below this level. Similar to last week, the price action seen in the last trading session of this week can be termed as an 'Inside Day' pattern. This candlestick formation occurs when the entire price range of a given day falls within the price range of the previous day. The pattern signals indecisiveness in the market because neither the bulls nor the bears are able to send the price beyond the range of the previous day. The said pattern will be confirmed below Thursday's low of 19451 / 5910. In this scenario, indices may correct towards 19250 - 19120 / 5860 - 5800 levels in the coming few sessions. With all the policy events out of the way and major quarterly results already declared, the lack of fresh triggers will be a concern for the bulls. Conversely, the weekly ADX (9) indicator and the 'RSI-Smoothened' oscillator are signaling a positive crossover. Hence, any move beyond this week's high of 19792 / 6020 would push indices higher to test the '52-week' high of 20204 / 6112.

Source : Equity Bulls

Keywords