Dear patrons, last week was a rollercoaster ride for the markets. The benchmark indices traded in the positive territory till mid-week but lost all ground on the weekly expiry day and the last trading day, markets opened flat and remained negative throughout the session to close down by around 1%.
As we had mentioned in the previous blog, 17200 acted as hurdle on the Nifty. The Nifty lost ground swiftly as is always the case with fall in the markets. Within a couple of sessions markets lost 2% ending the week below the all-important level of 17000.
The US Federal Reserve increased the interest rate by 25 bps during the week paving way for weak US markets. Contrasting statements by the US secretory of treasury, on bank bailout created confusion in the markets. As far as the US is concerned, we can say "no news is good news". Over the last week one of the biggest banks in the world Credit Suisse also announced concerns but was saved by timely take over by UBS. Failure of another bank is no good news for the global economy and concerns of recession are fast becoming a reality.
Moving back home, we have been consistently mentioning that Nifty is in "Sell on Rise" mode and have been correct in our assessment so far. Over the last month, from our mentioned level of resistance i.e. 17800 Nifty has lost close to 1000 points. The pain may persist for some more time. Let's see what is store for the coming week.
We can see Nifty falling on consecutive sessions and breaching the psychological level of 17000. On the daily timeframe Nifty remains in no support zone, meaning it may further slide down swiftly. The only solace one can find on daily charts is that in all probability Nifty has completed its 3rd wave down and may move upwards from 16800-16900 levels.
On the weekly charts also Nifty looks like it has completed its 3rd wave down and may move up towards 17400. The 17400-17600 zone may act as supply zone and profit booking may be seen around these levels.
BankNifty has been following levels mentioned in previous blogs. 39000 as mentioned previously has acted as strong support and BankNifty has consistently managed to close above this level. Resistance for BankNifty appears to be around 40000-40200 levels. Managing to close above 40200 opens the move towards 40800 on the BankNifty.
The markets still remain "Sell On Rise". Traders need to be cautious and adhere to strict stop losses. The coming week being the expiry week and a truncated one, may see jump in volatility and wild moves either side may be visible in the markets. We do believe that we are yet to see the bottom of this corrective phase.
"Srock market is above individuals. The market is rational. An individual can never be smarter than the market" ~ Rakesh Jhunjhunwala
P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.
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