Colossal rally despite a truncated week, 9000 reclaimed convincingly: Angel Broking

Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):

"After an extended weekend, our markets kickstarted the new trading week on Tuesday with a decent bump up of more than 300 points. This was mainly on the back of a strong relief move seen in US markets as the death toll with respect to coronavirus reduced a bit and thereby gave early signs of subsiding this pandemic. Although, the close was muted on Wednesday, markets compensated well by yet another gap up opening on the subsequent day. In fact, the buying momentum accelerated in the latter half to conclude the week well above the 9000 mark.

Looking at the colossal rally of more than 12% on a weekly basis, who would believe that it was a truncated week and in merely 3 trading sessions, the Nifty is convincingly beyond 9000. As far as the coronavirus pandemic is concerned, in reality, we are still not out of the woods yet. But market mostly moves on hope or anticipation, this is clearly one of those instances. Practically, the major impact of this epidemic has already been discounted by markets across the globe in last few weeks and there was just a small ray of hope needed to rebound sharply from extreme oversold or under owned situations. With this, previous Friday's decline becomes a bear trap as we are significantly off lows now before anyone could realise.

Technically speaking, the Nifty has now managed to surpass the '20-day EMA' for the first time since 24th February. Since there was a complete broad based participation in this move, it can be considered as a robust one. Looking at the way charts are shaped up, we will not be surprised to see this rally getting extended towards 9500-9700 over the next few days. However, one must not forget that the recent crisis is related to 'Health' and hence, it would be important to see further developments with respect to coronavirus over the weekend. If no aberration seen then the above mentioned levels are very much on cards. On the flipside, 8900 followed by 8650 would be seen as key supports. Traders are advised to keep following stock centric approach and should keep booking timely profits on a regular basis."

Source : Equity Bulls

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