Market Next Week Technically

Nifty 50 is losing its strength with every passing day. The same can be captured in the MACD indicator. The indicator is showing negative divergence with the price action indicating that the prices are moving higher but with lesser and lesser velocity. The upward channel trend line is also acting as a strong resistance. Short term traders should reverse their long positions if Nifty turns below 11600 and medium term positional traders should exit their long positions if Nifty 50 falls below 11400, till such time traders should enjoy the bull ride.

Expectations for the Week:

Markets are expected to remain largely under the profit-booking zone. IT stocks are undoubtedly riding on the bandwagon of rupee depreciation but in the short to medium term they have reached their overbought levels and are likely to correct soon. However, other export-oriented industries like textiles, auto-ancillaries have still some more room left for an up move. The Indian Government's rhetoric to merge PSU banks will not create short-term fireworks in the PSU Banking space but they still remain value buys for patient long-term investors. Traders should rotate their portfolio and book profits in companies like Reliance and other consumption stocks and enter stocks like SpiceJet and metal plays like Vedanta. Nifty50 closed this week at 11680.50up by 1.06%

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