Dalal Street week ahead: It’s still a bear market rally, lower your guard at own risk

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For yet another week, we saw a gush of liquidity chasing equities, which gave the Indian market a lot of buoyancy and helped it end yet another week with solid gains. The trading range for the week remained wider as expected. The headline index oscillated in a wide range, but ended the week with a strong gain of 561.85 points, or 5.86 per cent.What we are witnessing right now is one of the sharpest bear market rallies of our times amid a risk-on buildup.Whenever a risk-on setup occurs and when liquidity starts to chase equities, typically two things happen: first, a seeming disconnect occurs between valuations and macro-economic reality; and secondly, major technical setups and levels get violated regularly. In the present case, where the index has gained in seven out of past eight sessions, Nifty effortlessly penetrated an 11-year-old pattern resistance without halting even once. Yet, it remains a bear market rally as of now, as the index trad ..We may again start the new week on a positive note. The trading range is expected to remain wider just like the previous two weeks. The 10,200 and 10,375 levels will act as strong resistance for Nifty, while supports will come in at 10,000 and 9,810 levels.The weekly RSI stood at 48.93. It remains neutral and does not show any resistance against price. The weekly MACD has shown a positive crossover; it remains bullish and trades above the signal line. The percentage price oscillator, which measures relationship between two moving averages in percentage terms, remains positive. A White Body has emerged on the candles, signalling the same direction trend prevailed through the week.Pattern analysis shows some lagging indicators have turned bearish. The 50-week moving average, which now stands at 11,022, has cut the 100-week moving average, which is at 11,078, from above. The index trades below all its moving averages, and below the 200-week moving average, which stands at 10,353.more..