Weekly Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"The global set up has been excellent throughout the week, in fact, US markets hastened towards all-time highs after recent underperformance. However, we failed to capitalise on this positive development as some of the domestic wounds still continues to hurt us badly. Barring Thursday's session, there was no respite in our markets. Fortunately, despite various attempts to breach 11600, our benchmark managed to defend key levels and went on to confirm a weekly close tad above the 11700 mark.
During the early part of the week, index slipped below recent swing low of 11769, which triggered sharp selloff to retest sub-11700 levels. Despite a strong selling pressure, the Nifty managed to hold key support zone 11630 - 11591. These levels were critical supports because 11591 is the higher end of the 'Upward Gap Area' created post the exit poll numbers. And 11630 being the 161% Fibonacci retracement levels of the small up move from 11769.50 to 12000.35. This level coincided with the 'Potential Reversal Zone' as per the 'Bullish Wolfe Wave' structure, which is clearly visible on hourly chart. Despite a strong selling pressure on many occasions, we witnessed massive buying emerging in the zone of 11650 - 11630 and with Thursday's colossal move, the said pattern has been validated. Yes, Friday's decline was a bit unexpected for us; but we still remain hopeful and expect the index to breakout from the key hurdle of 11843.50. This would unfold the fresh upward leg of the rally to test 12000 first and then possibly fresh record highs soon. This optimistic approach remains valid as long as we are trading above the sheet anchor support of 11630 - 11591.
Clearly, the banking index outperformed our benchmark in the week gone by and there were few other notable movers too on the sectoral front. But, the way 'Midcap' index is shaped up, it clearly grabs our attention. The weekly chart looks extremely promising and soon we will not be surprised to see a strong rally unfolding in this universe. But still traders are advised to be a bit fussy when it comes to stock selection. It's better to stick to quality midcaps that are likely to give decent moves and should ideally avoid such consistent draggers despite giving eye-popping rebounds."