Market Technical Analysis

Market Technical Analysis - Tough Times Don’t Last

The Nifty lost 111 points over the week to close at 4941. A
volatile last week for the markets as they rallied in the first half to
test our ST target of 5130/17200 only to turn overbought and
correct significantly in the second half. The knee-jerk reaction
last Friday has not done much damage to the technical set-up as
the indices continued to sustain above the mentioned support
levels of 16600/4900. We think the decline was just another
shakeout and it provided an excellent buying opportunity. Most of
the technical indicators that were overbought in the middle of last
week have now moved into the neutral zone, which is an
encouraging sign. The daily RSI is close to the oversold line
while the moving averages are almost at the price action. The
only negative trigger last week was the development on the
DM/ADX study, which we think would get reversed (from sell
mode to buy mode) in the coming week. Only on a close below
the support of 4900 do we re-analyse the ST set-up. For the day,
supply seen at 4984/5011. Overall, the indices look set to retrace
their recent losses and get back above 5000/17000.