Gravity-defying moves for the markets; some cool-off seems on the cards
It was an exceptional week for the bulls as markets reached new milestones. Last week began on a negative note on Monday, with prices testing the previous week’s lows. However, the bulls saw this as an opportunity and pushed prices higher. Prices continued to climb for four consecutive sessions, surpassing the 24000 level for the first time. On Friday, the market opened positively and hit a new high of 24174, but some profit-taking in the second half led to a close just above 24000, marking a weekly gain of over 2%.
Amidst all the key events, June was a remarkable month for the markets, with gains exceeding 6.5%. This week’s upward move was particularly sharp, driven by strong performances across all major sectors, bringing smiles to traders and investors fraternity.
While the market appears to be in a strong bull run, the next move in the coming week might be challenging as oscillators across all major time frames are in overbought territory. Often, overbought conditions indicate potential inherent signs; however, in the near term, a cool-down cannot be ruled out. While taking contra-bets and shorting the market is not advised, taking some profits is prudent, as a correction, either in price or time, is anticipated. This correction should be seen as healthy for the ongoing bull run. Given the market’s vertical rise into uncharted territory, pinpointing key trading levels is challenging. However, 24200 to 24250 is expected to act as immediate resistance, while 23850 followed by 23650 may serve as crucial support levels.
Last week’s activity was not mainly driven by the heavyweight banking sector and Reliance, both of which had remarkable performances. During this period, the mid-cap sector was relatively quiet, but we may see action returning to this space in the coming week as key indices consolidate. Traders are advised to focus on stock-specific action for potential outperforming opportunities.
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