Volatility continues; geo-politics to hit market

Nifty reclaims the 20 MA mark indicating a short-term upswing with a break above key resistances which were placed at 16,800. It is important to note that the previous two weeks' price action was very much below the 50 MA mark on a weekly scale which has not been the case since August 2020.

As market witnessed a rebound and the previous weekly close was a tad above the 50 MA, which further pushed the positive sentiment for short term momentum traders. The momentum was swift with the one-sided move as Nifty managed to close at 16,871.30.

Gainers that further added this momentum were BankNifty, Finance, Service, and PSU Bank space adding 2+ per cent. BankNifty on another hand its own reason to underperform as it is still below 50 MA on the weekly scale but the short-term upside has put a lot of bullish bias in the market.

The short-term trend for Nifty is positive and we see upside resistance placed at 17,090 – 17,210, while on downside support is now seen at 16,400 – 16,600.

All said and done, the overnight volatility continues to remain elevated and we may see any geo-political event dampening the sentiment.

(The author is technical analyst at Finversify)