Index defends key support, remain optimist for near term: Angel Broking
Market Wrap-up by Mr. Ruchit Jain (Equity Technical Analyst, Angel Broking):
"This week started with a continuation of the previous week's negative momentum and the index approached its support zone of 11100 on Monday. As mentioned in our last week's update, this was the last ray of hope for our market and hence this support gained traders attention. Post the mid-week holiday, the markets witnessed a sharp surge in Wednesday's session and with some volatility in last couple of sessions, it managed to end the week tad above the 11300 mark.
During the early week, we had our fingers crossed around the 11100 mark and were hopeful of a bounce back from this support. This was mainly because this level had a confluence of supports. Firstly, it was the recent breakout level which was seen on the day of our FM announcing the corporate tax rate cut. This coincided with the 50 DMA as well as the 200 SMA on the hourly chart. The index has bounced back higher from this level and thus, it now becomes a sacrosanct for the near term. In last couple of sessions, the indices (especially Bank Nifty) has traded with higher volatility but has managed to end the week well above its support. Hence, we are optimistic on the markets from the near term perspective and advise traders to look for buying opportunities from a short term perspective. This positive view will remain intact till the index trades above the swing low of 11090 and hence, this level could be referred as a stop loss on the long positions. On the higher side, 11400 is the immediate resistance for Nifty, but we expect it to be taken out soon and could then see a trended move in the broader markets to resume the uptrend. Above 11400, the Nifty could rally towards 11560-11630 which will be immediate target range to watch for.
Amongst the sectorial indices, the daily range for the Bank Nifty has widened drastically and has become extremely challenging for traders to place their bets. The key support for Bank Nifty is seen around 27500-27000. As far as this support is intact, one can remain hopeful for some good moves in upward direction. On the Nifty Metal index we have witnessed a bullish engulfing pattern on the daily chart which is a bullish reversal pattern. Sooner or later, we expect we sense some buying to emerge in stocks within this space too."