Markets rebound from early-week setbacks, entering a corridor of uncertainty At the beginning of the week, global financial markets were under significant stress due to various factors. Reflecting this tension, the Nifty opened on Monday with a sharp gap down of over 400 points, followed by continued selling throughout the day, testing levels below 23900.
Although prices attempted several rebounds during the rest of the week, they largely remained under pressure. However, on Friday, there was a noticeable improvement in global cues, allowing the market to close on a positive note. Despite this late recovery, the market ended the week down by 1.43 per cent, finishing just above the 24,350 level mark.
The week was largely dominated by bearish sentiment, but the bulls managed to defend key support levels with conviction. Prices have now entered a corridor of uncertainty, with the next trend not very clear.
The weekly chart shows a bearish gap at higher levels, suggesting weakness, yet there is also some buying interest at lower levels. On the daily chart, after Monday’s sell-off, prices traded within a defined range of 24,000 – 24,400 throughout the week. The upper end of this range aligns with the 20 EMA and the bearish gap, while the lower end coincides with the 50 EMA.
Looking ahead to next week, momentum could be triggered if prices break out of this range. A breakout above 24,400 – 24,450 might generate optimism, potentially filling the recent gap at 24,700. However, given the ongoing global uncertainty, any bounce could be an opportunity to reduce long positions.
On the downside, support is seen at 24,100 – 24,000, and a break below this range could lead to further declines in the near term. Traders should closely monitor these levels and plan their trades accordingly.
It’s also advisable to focus on stock-specific actions, adopting a selective approach. Since market movements were primarily driven by global cues, it’s essential to stay updated on those developments as well.
(Rajesh Bhosale is an equity technical analyst at Angel One Ltd. Views expressed are his own.)
First Published: Aug 12 2024 | 7:44 AM IST
