Our markets had a splendid start for the week owing to favorable developments in US markets over the weekend. At the close, Nifty did not disappoint as it reclaimed 18100 on a closing basis. Honestly, we expected the market to come out of its recent slumber phase; but once again, markets failed to sustain at higher levels. The nervousness creeped up as the week progressed and, in the process, we gradually sneaked below the 18000 mark in fact, in the last couple of sessions, we did challenge the recent swing low of 17774. Fortunately, the heavyweights came for a rescue at lower levels, resulting in a smart recovery to reclaim 17950 on a closing basis.
It was indeed a challenging week for the market participants as the trending moves were clearly missing. Nifty remained in a range and whenever it seemed a trend has established, the market would reverse in the opposite direction. We, however, remained glued to our stance and instead of swaying with the market moves we considered buying on the lower side of the range. On the weekly chart, we can see a ‘DOJI’ pattern that indicates uncertainty, and it seems market participants are waiting for some trigger for the next directional move. In our sense, the December month swing low around 17750 is acting as a fortress for the bulls and as long it holds; one should continue with the buy-on-dip approach. On the flip side, as the trading range is getting coiled, the resistance levels are shifting lower. On the hourly chart, we can see a trend line resistance around the 18000 – 18050 levels, and prices have ended just below the same. Going ahead a sustained trade beyond the same can trigger positive momentum in the coming week. The stiff hurdle remains around 18300 which once broken can resume the primary uptrend.