In line with what was anticipated in the previous weekly technical note, the Indian equity markets witnessed profit-taking bouts from higher levels along with spikes in the volatility that is hovering around one of its lowest levels of recent months. It was also expected that the current uptrend might stand disrupted and the markets may slip under corrective consolidation. The trading range again got narrower; against 499 points in the week before this one, the NIFTY oscillated in a 232.75 points range.
Though the directional bias on either side was not dominant, the overall move stayed with an inherently negative bias. The headline index closed with a net loss of 88.70 points (-0.45%) on a weekly basis. Despite slow retracements from the high point, from a technical perspective, the levels of 19991 have now become a temporary top for the markets.
The VIX also spiked; despite the on-and-off nature of the move, the volatility as represented by INDIAVIX surged by 8.99% to 11.52. Despite the surge, it remains at one of the lowest levels seen in recent months and continues to leave the market vulnerable to corrective moves and violent profit-taking bouts from higher levels. Following this corrective move, the NIFTY has dragged its resistance lower to 19700-19750 levels; any technical pullbacks will find resistance in this zone.
We have a truncated week coming up with August 15th will be a trading holiday on account of Independence Day. The markets are likely to start the week on a quiet note and exhibit tentative behavior throughout the week. The levels of 19580 and 19650 are likely to act as potential resistance points; the supports will come in at 19350 and 19200 levels.
Read more on economictimes.indiatimes.com