BY SANDEEP PORWAL TECHNICAL AND DERIVATIVES ANALYST, ASHIKA STOCK BROKINGWhere we are: The last couple of weeks remained action-packed as market participants saw an unusual rise in volatility.
Yet again, the level of 12000 acted as a strong support.
Despite a sharp fall, the index managed a close above the key level and traded higher.
The short-lived pullback followed by a sharp rally indicates a tussle between the bulls and the bears.
Nifty PSU Bank and Nifty Energy were key underperformers in the week gone by while Nifty Realty bucked the downtrend and topped the charts.
In this phase of uncertainty traders/investors lapped up small-cap stocks too; this index had shown relative strength in the week gone by.What is in store? The level of 12300 continues to remain a strong resistance as multiple attempts by bulls to surpass it failed for the last four weeks.
However, sharp reversal from the intermediate lows indicates bias turned bullish; in the event of a close above the 12300-12350, we are likely to see an extension of a rally.
Nifty Bank is trading above its 20 - 50 DMA, which are placed at 32070 - 31540, respectively.
Thus, expect a follow-up buying up to the level of 32610 in the coming trading sessions.What could investors do? The technical setup suggests that long-awaited small and midcap rally may take place.
Thus, one can look to add quality stocks from the respective space.
We recommend the addition of longs in M-M, Exide, Apollo Tyres and Shoppers Stop while sell on the rise is advised in RIL.