Bulls in a refueling mode - Angel Broking

Trading for the week on Tuesday began slightly higher as indicated by the SGX Nifty. This momentum continued during the first half, which resulted in an intraday rally of nearly a percent. But, post midsession; we witnessed a strong profit booking in some of the heavyweight constituents. As a result, the index shaved off major portion of its gains and eventually closed with nominal gains. Rest all sessions traded with lethargic movement and hence concluded the week on a muted note. On a weekly basis, the Consumer Durable, Metal and FMCG sectors were among the major gainers; whereas the Capital Goods, IT and Oil & Gas counters witnessed a modest correction throughout the week. The Sensex and the Nifty ended the week with a negligible loss of 0.16% and 0.14%, respectively, over the previous week's closing.

Pattern formation:

- The '89-day EMA' and the '89-week EMA' are placed at 20894 / 6216 and 19654 / 5885 levels, respectively.

- The '20-day EMA' and the '20-week EMA' are placed at 21471 / 6397 and 20926 / 6227 levels, respectively.

- The weekly chart clearly exhibits a breakout from the 'Bullish Flag' pattern.

It's been two weeks now since our markets posted a new all time high on a closing basis. We are neglecting all the negative developments that are taking place across the globe. This clearly indicates strength of our markets. Technically speaking, we are not observing any major change in the chart structure. The weekly 'RSI' momentum oscillator level is now moving beyond the 60 mark, which is sign of gaining strength of the higher degree trend i.e. bullish. Hence, we reiterate that sooner or later markets would move out of this consolidation phase and the index is likely to head towards 6700 - 6780 levels. Traders are advised to avoid intraday trading and stick to their positional approach as it has become a buy-on-dips market. On the lower side, the strong support zone is seen around 6450 - 6430 levels. A dip (if any) towards this support zone can be used as a buying opportunity.

Source : Equity Bulls

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