Weekly Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Last weeks' price action was clearly divided into two parts, first half was the rub off effect of previous week's turmoil due to US - China trade war and the second half was the hope rally ahead of the exit polls result. On Friday, we witnessed a complete gush towards the fag end, which pushed index significantly higher to reclaim the 11400 mark on a closing basis by recouping over a percent from the previous week's damage.
We are now stepping into a crucial week and since the election verdict is one of the most watched as well as influenced event for our market, people should gear themselves up for wild swings. Since last couple of week, global uncertainty has been weighing down heavily on our markets; but now, till the time this event gets over, we may probably be decoupled from the global peers for a while. As we all know, such events are difficult to predict and since they can have a massive impact on near term movement, one needs take several scenarios into a consideration.
Now, let's dig into a bit of technical. The Nifty has managed to reverse from the 61.8% retracement of the recent up move and due to this, on weekly chart, '20-EMA' has been successfully defended on a closing basis. Going ahead, 11600 - 11800 these are the levels to watch out for in the upward direction and on the lower side, 11286 - 11050. The major trend will get confirmed only after Nifty giving a decisive breakout from the broader range of 11800 - 11050. But if we just have to guess on one possible direction, looking at current chart structure, we would remain hopeful as long as 'Multi-Month Trend Line' support of 11050 - 10900 remain unbroken on a sustainable basis. Below this, no brainer, we may see sharp declines and on the other hand, a move beyond the higher end would resume the broader degree up trend. Going by our recent articles, traders need to remain a bit light on positions and one should rather look to accumulate marquee propositions in a staggered manner. We would like to highlight one notable observation, the 'midcap index' which has not participated in last one and half a year, seems to be in a final stage of its price-wise as well time wise correction. So in case of favorable outcome, we expect midcap stocks to attract traders' attention."