Market to consolidate for a while but bias could be negative: Angel Broking

Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):

"Overall it's been a week of consolidation for our markets as we saw Nifty gyrating in a thin band of 144 points throughout the week. Eventually, the index managed to reclaim the 9850 mark on weekly basis, courtesy to smart recovery on Wednesday.

If we summarize the overall price development in last couple of weeks, it seems the index has now slipped into a consolidation mode. Although, Wednesday's smart recovery in the latter half was slightly on unexpected lines, we would continue with the recent cautious stance. The reason behind is if we look at the hourly chart meticulously, it can be seen that the recent rally is still a bounce back move towards the 'Upward sloping Trend Line' level of 9855, which coincides with the '89 EMA'. In addition, the higher degree (weekly) chart is not very encouraging as we saw some distortion in the penultimate week. Having said that we must accept the fact, although markets are bit tentative, they are not correcting the way they generally tend to. Our sense is, the market is not so heavy at this moment and hence, we are experiencing shallow corrections. Hence, looking at the recent price action along with the negative placement of the 'RSI-Smoothened' on weekly time frame, we expect the index to consolidate for a while. But, within this, it is likely to trade with a negative bias.

Directionally speaking, we would expect the Nifty to slide towards the daily '89-EMA' level of 9640 - 9620 and even below that in the coming weeks; whereas, in the upward direction, crossing the 10000 mark would be a daunting task in the near term. Traders are advised not to get carried away by this bounce back; as such moves in a consolidation phase can be deceptive at times. At this juncture, a prudent strategy would be to keep tracking above mentioned levels and following a stock centric approach."

Source : Equity Bulls

Keywords