Technical & Derivatives Report - 9th November 2020: Angel Broking
(Time Zone: Arizona, USA)
Technical & Derivatives Report by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"It was one of the remarkable weeks of trade for our markets; rather we can say for the entire world. As we stepped into an eventful week on Monday, things were very much different. We had a lot of uncertainty around us, which spooked markets in the previous week and were battling around the key supports, which at one time looked like getting breached. But fortunately, the buying emerged right from the first day and the moment counting started for the race of becoming a US President, markets started reacting pleasantly. In fact, they just took off in the last couple of days to clock whopping gains over Five percent for the Nifty and more than Twelve percent for the Bank Nifty on a weekly basis.
Honestly speaking, it was one of the rarest bigger events when markets had a smooth unidirectional move throughout the week and fortunately, it's in the northward direction, which is gratifying for market participants across the globe. Yes, we should not ignore the fact that the actual verdict is yet to come, so you never know how the reaction would be in this week. But it seems that the markets have completely shrugged off / discounted the complexity of this event and have just seen the bright futuristic picture. Despite some challenging times, we remained hopeful at the start of the week as long as the key support of 11600 - 11500 is not violated. Market not only defended it but is very much at a comfortable position now with new record highs in sight. Technically, we can see a 'Bullish Flag' breakout happening along with a 'Breakaway Gap' on a daily chart. It is considered a strong development and hence, we are likely to move beyond previous highs soon. So, 12430.50 is the first level to watch and post then the theoretical target of the 'Flag' pattern is around 12700. Further levels can be projected as we move forward.
On the flip side, Thursday's gap area of 12027.20 - 11929.65 should act as a strong support. This rally can be considered a healthy one because almost all sectors have contributed to it and financial space has dominated it along with the late participation from the broader market. The much awaited breakout in the Midcap index has already been confirmed, which generally happens when the market feels that the uncertainty is behind us and we are 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."