By VK Sharma,
I couldn’t have been more wrong last fortnight, as Santa played truant.
I had expected the markets to soar, as the Nifty had rebounded from the neckline of the inverse Head & Shoulders pattern (trendline No. 34) on December 13 and recorded its highest close since October 21.
The markets took a sharp U-turn for the worse from December 16, continuing to slump each day and losing 1,231 points (4.97%) in the first week of the fortnight. Last week, it recouped 351 points intraday but ended with a gain of 226 points (0.96%).
The Nifty at 2,3813 is now below all its key averages, be it the 10,20,50,100 or 200 days simple moving average.
There were only four trading sessions last week and all the trading took place in the shadow of the large candle that was made the previous week on 20th December.
The first support is at 23,537, the low formed on December 20, followed by the next support at 23,263, the low formed on November 21. This marks the lowest point recorded during the ongoing correction, which began after the all-time high was reached on September 27.
The first resistance for the Nifty is at 24,065, which corresponds to the high of the large bearish candle formed on December 20. This level also aligns with the neckline of the inverted Head & Shoulders pattern (trendline No. 34). As this is a downward-sloping trendline, the resistance level will decline slightly each day. The next significant resistance is at trendline No. 36, formed by connecting the highs of December 5 and December 20.
Meanwhile, key US indices slipped on Friday. The Dow declined 0.77%, the S&P 500 dropped 1.11%, and the Nasdaq fell 1.49%, driven by rising bond yields. The 10-year Treasury yield reached a high of 4.64% during the day, the highest since May this year. Wall Street appeared concerned about Trump’s potential trade policies and next year’s interest rate expectations.
For the week, however, the key indices have snapped a three-week losing streak and closed higher. The Dow rose 0.4%, the S&P 500 jumped 0.7% and the Nasdaq surged 0.8% for the week.
While Trump is expected to walk the talk when he assumes office on 20th January, I see a silver lining in Elon Musk’s argument that the US should be allowing in more immigrants,
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