Merry Christmas on Dalal Street?? - Angel Broking

Our markets kicked off the week on a muted note considering quiet global cues. Just ahead of two major policy events, the index remained range bound for the first 2 days of the week. On Wednesday, we witnessed a strong rally on Dalal Street as RBI Governor Mr.Raghuram Rajan pleasantly surprised everyone by keeping the key policy rates unchanged. However, this optimism didn't last too long as the 'Taper Talk' from the US Fed led to a selloff in banking counters. The concluding session once again surprised market participants as we witnessed a massive intraday rally of nearly one and a half percent, leading the Nifty to close at the highest point of the week. The IT, Teck and Healthcare counters once again became the major gainers; whereas Banking was the only sector which closed in the negative territory. The Sensex and the Nifty advanced by 1.76% and 1.72%, respectively, over the previous week's closing.

- The '89-day EMA' and the '89-week EMA' are placed at 20328 / 6047 and 19176 / 5755 levels, respectively.

- The '20-day EMA' and the '20-week EMA' are placed at 20822 / 6197 and 20320 / 6046 levels, respectively.

- The daily momentum oscillators are now witnessing a positive crossover.

- The 'Bearish Engulfing' Japanese candlestick pattern on the weekly chart is still intact.

The market witnessed significant volatility and see-saw movement during the week and it were the bulls who had the last laugh. As estimated in our previous report, the index gave decent respect to the 61.8% Fibonacci retracement level of 6149. Considering the hourly chart structure along with the positive placement daily momentum oscillators, we expect the Nifty to retest 6350 - 6415 if it manages to sustain above 6285 level.

On the flipside, the 'Bearish Engulfing' pattern formed during the previous week is still intact. Hence, last week's low of 6129 is now a crucial support for the index. Any sustainable move below this level would trigger significant pessimism in the market. In this scenario, we expect the index to slide towards the strong support zone of 6050 - 5970 levels. The coming week is likely to trade with low volatility on account of lack of participation from the FIIs.

Source : Equity Bulls

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