Friday the 13th turned out to be an eventful day for the Nifty. It initially plunged 368 points during late morning trade but rebounded strongly to close with a gain of 220 points, or 0.89%. The index experienced a wide intraday range of 611 points.
Though the Nifty closed with a gain of just 0.37% for the week, Friday’s large candle not only completely engulfed the week’s trading but also a major part of the fortnight, which lends credence to the up move seen Friday.
Another notable action, of which we had spoken in the last article was that the neckline of the Inverse Head & Shoulders was indeed crossed last fortnight, and the Nifty took support on the neckline twice. The first support was taken on the 5th of December, on the day when the trading range was 563 points. The second occasion was last Friday when the Nifty just bounced back from the neckline.
Now that the neckline was successfully tested twice it has become a strong support. Friday’s close of 24768 is the highest close since 16th October. One can now expect that the Nifty could possibly gun for 25,400 in the coming weeks.
Marketmen should first watch for a close above the 25,125 mark. What’s so special about that? Well, it happens to be the level at which the Nifty would recoup 61.8% of the 3014-point fall from its all-time high mark attained on 26th September. The attainment of this level would negate the fall the markets have seen, and we could look forward to a new high being made in the coming months.
The Bank Nifty too is in good shape. It made a large 1,390-point candle on Friday and closed 0.69% higher for the day and 0.14% for the week. It is now just 1.62% away from the all-time high mark of 54,467.The Nifty SmallCap and MicroCap indices(tail), which had risen in tandem for 14 consecutive sessions before correcting on 12th December recouped a major portion of their intraday losses Friday but couldn’t close in the green. The tail, which we spoke about in the last article has wagged the dog (Nifty) successfully.
With a 0.2% fall last Friday the Dow Jones Industrial Average, the 30-share benchmark of the New York Stock Exchange, has now declined for seven sessions on the trot.
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