Dalal Street week ahead: Nifty ’s loss of momentum intensifies; protect profits

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In the last week,the technical pullback lead to big fluctuations in the stock markets. Even with a 500 point oscillation and trading range, Nifty settled at a net loss of 112 points that is 1.21 percent on a weekly basis.

On Monday, with a provisional start, the 9,230 and 9,445 levels are likely to act as overhead resistance, while supports are expected to come in at 9,065 and 8,900 levels. The India Volatility Index has drastically reduced by half from its peak due to 8.16 percent decline to 39.12 level.

The Relative Rotation Graphs puts Pharma index firmly in the leading quadrant along with FMCG indices. According to the predictions, they’ll outperform the broader Nifty 500 index in the coming week. Subtle improvements are seen in the energy and infrastructure sector. The other key indices like Bank Nifty, PSU banks, metals, financial services, media and auto are dripping down incessantly pushing down the already lagging quadrant. The IT index is also in the leading portion but with a lesser momentum. A few company specific stocks perform extremely well but in a general notion, it is time to shift the spotlight from this sector. At this point, trading with caution is highly recommended.

The Relative strength index also stood at 32.58 without any divergence against the prices. MACD, for this week, shows bearish conditions with trading below the signal line. PPO is also negative. Nifty is on the edge of critical resistance zone.

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