Stock markets generally had a positive week, but widespread sentiment remained somewhat volatile as Nifty fluctuated in both directions on the five trading rounds before ending on a positive note.
The index saw itself break out of the trading range 16400-15700 which is wide enough in its own way; however, it was rebounded and strengthened again in the narrow range.
The trading gap also remained a bit narrow; against the 511-point range in the week before this, Nifty fluctuates at a smaller, 355-point range.
Although the index remained largely positive, the index did not take a large step higher. The Nifty50 headline ended with a net profit of 231.85 basis points (+ 1.42%) on a weekly basis.
From a technical point of view, the break over 16400 points has made this point an immediate support level for Nifty in the near future. In addition to this, Nifty has so far kept the double bottom that forms close to the immediate low point of this range. The most pressing resistance of the index is the 50-week MA which now stands at 17056; this again makes the area 16400-17000 yet another trading area for the index.
Apart from this, fluctuations also decreased during the week; INDIA VIX decreased by 7.01% to 19.98.
Next week will be important for the market. The index trades in a narrow trading area; it will require a comprehensive push over 17000 points. Levels 16700 and 16950 will act as immediate resistance levels; Support is expected to enter at 16520 and 16380 levels.
The weekly RSI is 46.47; it shows a slight bullish deviation from the price.
The weekly MACD is bearish and stays below the mark line. There was a spin on the candles; this shows the temporary and indefinite behavior of market participants.
The pattern analysis shows that the index is below the 50 week MA as of 17056. However, it is above the 200 and 100 week MA.
The move towards a 50-week MA will also take the index into very important pattern resistance; this pattern resistance is the trend line that was broken by Nifty on the way down.
All in all, we could continue to see the market trade tentatively. It is largely assumed that markets will continue to be highly stock-specific in nature.
We could see the unique performance of equities in all sectors rather than any particular sector dominating this week. It would be extremely important to have the right type of stock. It is recommended that the emphasis be on avoiding shorts and using the dips, if any, to list stocks that are showing improvement in relative strength. We can expect a good show from pockets such as energy, PSE, consumption, information technology, etc. the next few days.
When we looked at Relative Rotation Graphs®, we compared various sectors with the CNX500 (NIFTY 500 Index), which represents over 95% of the market value of all listed stocks.
The RRG analysis shows that some pockets lose strength due to their momentum against wider markets. The metal index has fallen even further during the weakening quarter. In addition, the real estate index, which had improved in the previous week, has lost significant momentum and has returned to the second quarter. We could see these pockets perform relatively well under the broader Nifty500 index.
The Nifty Consumption, FMCG, Infrastructure, Pharma, PSE, Commodities and Midcap 100 indices are in the top quarter. However, few of these groups are seen to give up their relative momentum towards wider markets.
Nifty Media has returned to the weakening quarter; PSU Bank continues to be in the weakening quarter as well.
The Nifty Services sector and the Nifty IT indices remain in the second quarter. These pockets could see a relatively poor performance against broader markets, but some stock-specific performances from these groups may not be ruled out.
Both the Bank Nifty and Financial Services indices have rolled into the improving quarter.
Important note: RRGTM charts show relative strength and momentum for a group of stocks. In the chart above, they show relative performance relative to the NIFTY500 index (broader markets) and should not be used directly as a buy or sell mark.
Mail Bonus – #Dalal #Street #Week #Ahead #market #continue #stockspecific #nature