Nifty continues to trade with corrective bias as the index declined for third consecutive weeks to close down by 0.8 per cent at 11724 points amid concerns over domestic liquidity and lingering trade war tension between the US and China.
The Nifty Midcap performed at par with the benchmark and closed down by 0.8 per cent whereas the small-cap index underperformed and closed lower by 2.6 per cent.
In the coming week, a follow-through action above previous week's high of 11844 points will lead to an acceleration of up move towards the upper band of the past four weeks range of 12000 points, failure to do so will lead to choppy consolidation in the range of 11600 to 11850 points level.
Volatility is likely to remain high in the coming week on account of the June month F&O expiry.
The index has already taken 13 sessions to retrace 90 per cent of preceding 11 sessions up move from 11591 to 12103 points. It is being believed that one should not panic in the ongoing prolonged consolidation of 12000 to 11600 points. Hence one should accumulate quality stocks in the current consolidation for the next leg of the up move.
The key observation in the index behaviour since October 2018 lows of 10005 points is that the index has maintained the rhythm of not correcting more than 61.8 per cent of the previous major up move. It is being expected that the index may follow the same and the current corrective decline should anchor around 11600 to 11500 levels.
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