Bulls continue to show some resilience, all eyes on 14200 - 14150 : Angel Broking

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

"Similar to previous week, the markets once again surprised everyone with a huge downside gap on Monday. It seemed as if we were completely decoupled with the global peers as the weak opening had nothing to do with the global cues. Since, we are battling with the mounting concerns over COVID-19 cases in our country; markets are having a kneejerk reaction to this. In the initial trades, the selling augmented to challenge the 14200 mark. Fortunately, market saw some buying interest at lower levels as we did not spend much time below this key support. Similar sort of resilience was being witnessed throughout the remaining part of the week to trim some portion of losses.

Markets are completely clueless which way to move in the near term. At higher levels, we are facing some pressure as the battle continues with respect to the pandemic and on the lower side; bulls are clearly not willing to give up. Hence, it has become very difficult to take any kind of directional call on the market. As far as our recent stance is concerned, we have been quite cautious on the market and despite Nifty still holding on to a key support zone of 14200 - 14150, we continue to advocate caution till the time some important levels are not surpassed. For Nifty, the immediate resistance zone can be seen around 14575 - 14650, where a sustainable move beyond 14650 would negate the possibility of further correction to resume the upward trajectory. On the flip side, all eyes on 14200 - 14150 and the more it gets challenged, the higher it creates the possibility of breaching it. Below this, Nifty opens up the downside zone of 14000 - 13700.

Ideally, the way market is attracting buying interest at the support zone, we should have considered this as an accumulation. But there are a couple of observations that are holding us back and they are, 1) the banking index slipped below its rock solid support of 32400 and till the time it does not reclaim 32500 - 33000 convincingly, it is likely to be the major dragger. 2) Importantly, the overall positioning of the 'NIFTY MIDCAP50' index is completely overlooked by the market participants in general. Last week, we had highlighted about the breakdown from 'Head and Shoulder' pattern in this index and the weekly chart too confirmed a 'Lower Top Lower Bottom' for the first time in this entire marathon rally started last April. All these factors do not bode well for the bulls and hence, till the time we do not see negation of these unfavorable developments, one should continue to remain light on positions."

Source : Equity Bulls

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