Dalal Street Week Ahead: Nifty may continue to remain under corrective pressure

We have a long weekend this time with Monday, 27th November being a trading holiday on account of Guru Nanak Jayanti. The coming week also has a monthly derivatives expiry lined up as well. Tuesday will see the markets starting by adjusting themselves to the global trade setup. The levels of 19900 and 20030 are likely to act as potential resistance levels.

Even if there is no major decline, it is capable of injecting markets with some spikes in the near term. It is strongly recommended that one needs to keep leveraged exposure at very modest levels and stay invested in the low beta stocks and with the ones that have improving relative strength. A cautious approach is advised for the coming truncated week.

We enter a “decisive” week; going by the technical setup on the charts, markets may look at initiating a definite directional bias this week and whatever trend it catches on may stay on at least for the short term.

​​The volatility remained immense given the amount of uncertainties that surrounded the happenings around the world. NIFTY had large and wide moves through the week; the Index oscillated over 1147-point and finally ended with a net loss of 617.80 points (- 3.58%) on a weekly note.

The highlight of the week was the surging US 10-YR yields that put pressure on global equities and India was resilient, but no different. The markets went on to test key support levels on the weekly charts and experienced a technical rebound from there.

The weekly RSI stands at 75.90; it has made a fresh 14-period high. However, it stays neutral and does not show any divergence against the price. The weekly MACD stays bullish and above its signal line. The price has closed above the upper Bollinger band; however, while this can be considered bullish, a temporary pullback inside the band cannot be ruled out.

If the markets show any incremental upmove, more emphasis and focus would be needed to book and protect profits rather than making new purchases.

The coming week is again likely to see a slightly tepid start. The levels of 17250 and 17350 are likely to act as potential resistance points. The supports come in at 16900 and 16710 levels. The trading range will continue to stay wider than usual.ET M

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