by Mr. Rahul Sharma, Sr. Technical Research Analyst, Equity99. Pls see if you can use this in your coming week story.

On third straight week nifty closed in green sign at new highs. On the weekly chart, a formation of spinning top candle is seen which is a reversal pattern as the body is small with wicks on both sides being bigger than the range of its body. This indicates a volatile range is observed while neither bulls nor bears have taken advantage of the same. Technically it is also observed that Post breakout from 11180 the range for the market has become narrowed in present week in a range of 125 odd points. To add more concern we have the volume on the declining mode for the last three consecutive weeks.

Industrial production for the month of June expanded at a robust 7% led by strong growth in manufacturing and capital goods sector, which contributes 78 percent to the index. The IIP had risen by 3.2% in the month of May dragged down by sluggish growth in manufacturing and power sector. Looking at the monsoon and favorable input prices compared to previous month’s, we believe these numbers are quite sustainable. It is also necessary to consider the impact of inflation in this season. We are expecting a slight rise in WPI but it will be in the higher range of RBI. Looking at IIP and GDP nos, one thing is quite clear that India is on high growth trajectory. Overall we are in strong momentum run so buy on dips will be best strategy in coming days.

On technically front NIFTY is in overbought zone. Momentum oscillators are in over bought zone. Now on weekly basis NIFTY has strong support at 11360 level, break will take it to 11295 level. Keep strict stop loss of 11295 for buys. On the upper side NIFTY will face hurdle at 11500 level which is also psychological hurdle, cross over will create huge short covering upto 11550 levels.