Nifty back to pre-COVID levels above 12100: Angel Broking

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

"After last week's weakness, our markets stabilized this week and in fact, it just took off in the last three days. This is mainly on the back of strong recovery in US markets ahead of the US election verdict, as the market seems to have absorbed most of the uncertainty from the event. Due to spectacular overnight rally in global bourses and the firmness today morning resulted in a massive bump up at the opening well above the 12000 mark for Nifty. Post the initial trade, the index consolidated with a positive bias to conclude the weekly expiry well above 12100.

If we look back now, we can see how our markets were tentative four days back and we are now very much in a comfortable position, back to pre-COVID levels. This is a remarkable achievement after seeing some unprecedented things in the last seven months. Now, with reference to our recent commentary, we were quite vocal on the fact that we remain hopeful and expect a recovery as long as the sacrosanct support zone of 11600 - 11500 is not violated. Also the way we moved in the last couple of days, we anticipated a possible breakout in the upward direction. We have finally broken out from some crucial resistance and hence, looking at the price behavior, we expect this northward move to continue towards 12250 - 12400 now. But since, the actual verdict is yet to come; we cannot just overlook this development. Traders should keep a close track of it and how markets react post the outcome. But despite this, we still believe that in case of any weakness 12000 - 11900 should now act as a sheet anchor for the bulls.

Today, almost all sectors participated in the rally, which is always considered a healthy sign for the market. Also, we would like to highlight that the NIFTY MIDCAP 50 index which was consolidating and interestingly placed since the last few days, has finally confirmed a huge breakout on the daily chart. Mostly it is observed that Mid and Small cap indices confirm a bigger breakout only when the market feels that the uncertainty is behind us and is likely to witness some strong rally in the near future. Going by this logic, it adds more conviction and hence, we expect some encouraging moves to come in the broader market."

Source : Equity Bulls

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