Technical & Derivatives Report 27th January 2020: Angel Broking
By Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"The starting point of the week gone by was excellent as the pre-open suggested a bumper opening at records highs on Monday; courtesy to gap up opening in two major index movers (RIL and HDFC Bank ) after posting their quarterly numbers over the weekend. But this ecstasy at the opening was flatter to deceive. Markets started coming off fiercely right from the word go, in fact the selling aggravated as the day progressed to conclude with sharp cuts. This negativity continued for subsequent two sessions to slide towards the 12100 mark. Fortunately, the mighty bulls came for a rescue and were successful in pulling the market higher to end the week well above 12200.
It seems that looking at the recent behavior, market is giving full justice to the famous phrase 'All's well that ends well'. Technically speaking, we reversed precisely from a crucial juncture. Firstly, the support of 12100 was placed at the 61.8% Fibonacci retracement of the recent up move from 11929.60 to 12389.05 (proper traded high). And second but most important observation was the convergence of 'Upward Sloping Trend Line' drawn by joining recent swing lows with the low of 10670.25. Now, the forthcoming week would be crucial for our market as we are heading for one of the mega events, Union Budget slated on 1st February. So, most probably we are likely to see an action packed week especially for individual stocks.
As far as Nifty is concerned, we may see Nifty going back to 12300 - 12390 ahead of the budget and a positive outcome would enable it crossing this sturdy wall of 12400 convincingly. On the flipside, 12200 followed by 12150 would be seen as a sacrosanct support zone. Last week we had mentioned about 'Midcap' index entering an overbought zone and possibility of some breather cannot be ruled out. In line with this, initial part of the week, index remained sideways and was clearly bucking the trend by not correcting as much as our benchmark did. And once they settled, the 'Midcap' universe resumed its uptrend, which is likely to extend further."