Markets defy gravity, some cooling expected
This week was an exceptional one for bulls as the market hit a new milestone. Last week started negatively on Monday, with the price testing the previous week’s low. However, bulls saw this as an opportunity and pushed the price higher. The price continued to rise for four consecutive sessions, surpassing the 24000 level for the first time. On Friday, the market started positive and reached a new high of 24174, but profit taking came in the second half and the price closed just above 24000, bringing the weekly gain to over 2%.
With all the important events converging, June was a remarkable month for the market, recording a gain of over 6.5%. This week’s gains were particularly sharp, driven by strong performances across all major sectors, bringing smiles to the faces of fellow traders and investors.
Although the market appears to be in a strong bull run, the next move in the coming week could be challenging as all major timeframe oscillators are in the overbought territory. Overbought conditions often signal potential inherent forces, but the possibility of loss of composure in the short term cannot be ruled out. Although it is not advisable to bet against and short the market, it would be prudent to take some profits as a correction is expected, either in price or time. This correction should be considered as healthy for the ongoing bull run. Given that the market is vertically rising into uncharted territory, it is difficult to identify key trading levels. However, 24200 to 24250 is expected to act as immediate resistance, while 23850 followed by 23650 could act as key support levels.
Last week’s moves were not primarily driven by the big banking sector and Reliance, which performed spectacularly. The midcap sector was relatively quiet during this period, but we may see some movement in this space again next week as the major indices stabilize. Traders are advised to keep an eye on specific stock moves for potential outperformance opportunities.
