2 min read Last Updated : Sep 02 2024 | 6:58 AM IST
The bulls dominated the week, starting with a gap up on last Monday and steadily climbing to new milestones, extending the winning streak to 12 consecutive trading sessions. Nifty ended the week with gains of 1.66 per cent, closing just below the 25,250 mark.
August was an action-packed month, initially marked by sharp declines as prices corrected from 25,000 to 24,000 in just three days. However, as the month progressed, the market steadily recovered, reclaiming lost ground and closing the month with a 1.14 per cent gain. This price action formed a ‘Saucer’ pattern, indicating further potential for an upmove in the near term.
The reciprocal retracement of the August decline points to near-term targets of 25,400 and 25,500. During this week’s upmove, the market left behind a couple of bullish gaps—one on last Monday around 24,850 and another on Friday near 25,200. The Monday gap is particularly significant, as it also appears on the weekly chart, suggesting that any dip toward this level is likely to be bought into.
Before that, the previous swing high around 25,080 could act as immediate support. However, the next leg of the move may not be as smooth as recent trends.
The falling momentum during the recent upmove signals divergence, and the broader market is showing signs of weakness, with selective heavyweight stocks driving the gains.
Therefore, traders are advised to avoid complacency, be selective, use dips as buying opportunities, and book profits at higher levels to avoid potential setbacks amidst market volatility.
(Rajesh Bhosale is an equity technical analyst at Angel One Ltd. Views expressed are his own.)
First Published: Sep 02 2024 | 6:56 AM IST
https://www.business-standard.com/markets/news/broader-market-shows-weakness-after-action-packed-august-trading-tips-here-124090200048_1.html
