Market View – SMI – 21st May

Posted By : Kishore B.S

Hi Friends !!!
The Markets resounded the amazing move which was looked forward to for the the last couple of days. The session of the bounce back also was marred with the aptly reversal of the Indices at the Fibonacci Support level of 4782 as indicated in the charts below which indicated that the bounce back is not likely to be a one day wonder and could continue into another trading session to some extent.
The Indices though failed to close above the psychological level of 4900 yet the closure near that level and the upmove in the last hour of the trading session due to short covering whereby the Discount on the Nifty futures reduced from over 20 points to just 4 points also indicated that the bulls could be finally regaining their hold on the markets to some extent. However the velocity of the rally is a surprise and it can be clearly seen now that it is likely to face severe resistance around the 4980-5000 mark and the range bound momentum of the markets similarly to the April month cannot be ruled out where the indices could move in the range of 4740-5040 which is will be much larger than the 200 point narrow trading range witnessed during the April month of 5150-5350 levels.
As has been witnessed and largely said unless the indices manage to hold on the the 4760-4800 mark the bounce back to 5000 levels seems pretty clear for the time being and a break down below this support level of 4760-4800 could lead to more damage on the Indices to the levels of 4720-4650 where the GAP created in the charts could be covered and probably signal better and bargain buying opporunity.
Much can be written and said but it is for the markets and its participants to decide the direction of the markets and it would be best advised for us to follow the same.

(Inputs Mr. Hemanth .V, Faculty TA- Stock Market Institute)

Cheers!!
Team SMI

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