Monday saw a shaky start as the Nifty suddenly tripped more than 300 points in opening trades. Thankfully, people calmed down, and the benchmark was able to recoup the losses at the close. On a sadder note, what followed was an exact replica of Monday where Nifty corrected sharply going below the 17,000 mark towards the session’s close.
The bulls, however, managed to come through, and that too strongly. It was also supported by the global peers cooling off. The Nifty nearly retested 17,500 in the early trades on Friday with a steady recovery. But bears would not give up easily and dominated at higher levels to wipe off the major portion of weekly gains.
The market managed a positive close, but the week was certainly challenging. The market was unsure of its direction the entire week. Technically, the market is respecting the levels properly. In the beginning, Nifty rebounded after hitting the price target of 16,800, the ‘Head and Shoulder’ pattern. On Friday, it became nervous as it neared the stiff resistance zone of 17,500-17,600.
We are undoubtedly still in a ‘sell on rising’ sort of market, and we continue to remain alert. This view will hold ground until the Nifty crosses 17,900- the confluence point of two key trend lines. We also expect that the recent low of approximately 16,800 will soon tamper. It may happen immediately or after some consolidation in the 16,800-17,500 range.
Traders can go ahead with a stock-specific approach as the two sides of the Nifty are will potentially stay in a consolidation mode. But it is farsighted to keep booking timely profits, and considering the volatility of global markets, one should not conduct aggressive bets overnight. As far as levels go, 17,35 – 17,500, – 17,600 are the immediate hurdles. On the other hand, 17,000 – 16,800 is your cluster of support.
The stock had an extraordinary run from mid-August lows of Rs 108.50 to Rs 170 up in just 8-9 weeks. A magnificent rise followed it in the volume activity, which indicated buying interest in this counter.
Mid-week, however, saw the stock prices slip into a corrective mode. The price declined gradually and formed a ‘Downward Sloping Channel’ where both ends of this pattern were tested numerous times.
Stock prices have reached a support cluster where multiple technical pieces of evidence assemble. This poses a possibility of the recent corrective phase completing and the stock possibly moving upwards from there.
The pharma giant has been outperforming for a long in this space. As a result, its stock stood firm and moved upwards even after the June highs when most peer counters corrected sharply.
But recently, when the battered pharma stocks started recovering, this stock diverged. The divergence is unusual since mostly heavyweights move hand in hand. Stock prices sneaked below the daily 89-EMA’, providing robust support on multiple occasions.