By Mehul Kothari, Sr Technical Analyst, IndiaNivesh Securities Ltd.
The week went by remained extremely volatile for the domestic as well as world indices. Initially, the emerging markets nosedive following the crack in US markets. During the course, the index Nifty spot took a dip towards 10500 mark. However, strong buying at lower levels buoyed the index back above the 10800 mark. It wasn’t surprising at all since the markets are still trading with a mood of ‘Buy on Dips’ and that’s what Nifty did from 10500 mark. Eventually, the index ended the week with a gain of around a percent but still below the 11000 mark.
As shown in the weekly chart, 11000 – 11200 continue to remain a very strong hurdle for the markets. For a broader view, we expect the markets to respect support of 10330 and resistance of 11000 and trade within this band. A move on either side of the band might dictate the major trend for the coming few months. For the upcoming week, 10740 level might remain intermediate support below which we might expect some consolidation. However, the trend would chance only below 10330 mark. At this juncture, we advise traders to remain stock specific but avoid over-leveraged positions.
