technical analysis: Avoid aggressive bets as Nifty likely to face resistance near 16,900-17,200: Mehul Kothari

It was a robust week for markets the place bulls pushed the benchmark indices greater by over 1% every. What led to the value motion?
Could 2022 belonged to the bears since they dominated the bulls throughout the first half. Initially, throughout the first couple of weeks, the index stored inching decrease and breached the assist of 16400 – 16200.

The promoting strain was such that the index sneaked under the 16000 mark and virtually retested the swing low of 15670.

Nevertheless, this was adopted by an honest restoration within the markets throughout the second half of the month and the index closed above 16600.

Though the index rallied round 1000 factors from the low ultimately it misplaced round 3 per cent from the April month’s shut.

Within the latest week, the index began with an upside hole however consolidated within the later buying and selling session. Some softness in Friday’s session compelled the index to shut the week on a flat notice.
Evidently the market remains to be adjusting to the worldwide cues and the nervousness of the upcoming occasions just like the RBI coverage and the US Fed meet dented the emotions.

The place do you see markets heading within the coming week? Do you see the same momentum?
On the weekly charts, we’re witnessing a ‘Double Backside’ form of formation close to 15,700 mark. Thus 15700 could be a make-or-break degree for the markets within the coming months.

A breach of 15,700 assist may drag the index in direction of the 14,300 mark, regularly which is the 38.2% retracement of your complete rally which began from the 2020 yr’s low of seven,500.

Quite the opposite, the dying crossover of fifty and 200-Day transferring averages are nonetheless intact and therefore merchants shouldn’t be complacent in regards to the market situations.

For the approaching weeks, 16900 – 17200 is perhaps a robust hurdle since they’re the 50% and 61.8% retracement degree of your complete fall from 18100 to 15700.

The rapid assist is positioned at 16300 and a breach of the identical may herald additional nervousness within the markets. Merchants are suggested to keep away from aggressive bets and commerce on each aspect.

For the time we don’t anticipate any one-sided rally within the markets as a result of occasions just like the RBI coverage and the US Federal Reserve assembly.

By way of sectors, Realty and IT shares noticed shopping for curiosity. What led to the value motion? Do you see momentum persevering with within the coming week as properly?
After the sell-off in the previous couple of weeks in these sectors the valuations have change into engaging and as we noticed international sentiments enhancing.

These sectors acquired some shopping for from the traders. For the approaching week, there’s a chance that IT may proceed to do properly as a result of the markets appear to be a bit risky and defensive may additional entice shopping for curiosity.

Do you suppose the market has made a backside close to 15700-15800 ranges?
It’s troublesome to touch upon this in the intervening time as a result of a few technical causes.

1. If we have a look at your complete rally from the underside of 7500 in direction of the life excessive of 18600 then the index has nonetheless not retraced even 38.2% (which might be a wholesome correction). This retracement degree comes across the 14300 mark and time will inform whether or not we’re heading in direction of the identical or not.

2. As talked about above; the dying crossover on the day by day chart is undamaged and until the time 17400 isn’t taken out on a sustainable foundation; markets may hold encountering sell-off at greater ranges.

(Disclaimer: Suggestions, recommendations, views, and opinions given by the specialists are their very own. These don’t signify the views of Financial Occasions)