The last week saw the resumption of the post election uptrend un DJIA with a strong close last Friday, just a couple of hundred points from the all time high made in the prior week (weekly chart below). S&P and Nasdaq also surged higher during the week after taking support at the huge gap created on the 6th of November post the elections (daily chart below).
While the previous all time highs might prove as a resistance, the strong price action during the week suggests that the market is poised to reach new highs sooner rather than later. This despite a steady rise in the U.S.10Y Treasury Yield to +4.4% and the U.S. national debt surpassing $36 trillion for the first time in the nation's history on Friday.
Weekly Chart of DJIA showing a resumption of uptrend in the last week close to all time high
Daily Chart of S&P showing a resumption of uptrend after taking support at the post election gap up
Nifty, after falling relentlessly for 7 weeks over a distance of more than 3000 points, the deepest fall post Covid in the last 4,5 years, finally surged last Friday to produce a monster rally of 600 points from the previous day's close. With this, the weekly chart looks positive with a Bullish Harami candle, poised to rise further in the aftermath of the electoral win of the ruling party in Maharashtra, a significant event.
Need to mention the price action of CNXIT which is on the brink of breaching the previous all time high after a consolidation lasting 10 weeks. The last week's candle is remarkably strong as it represents a significant sell failure with the low breaking below strong support last Monday before reversing and closing strong on Friday. Such price action can produce very strong momentum in the opposite direction as they trap the bears on the wrong foot.
Weekly charts below for Nifty and CNXIT.
Weekly Chart of Nifty showing a Bullish Harami candle
Weekly Chart of CNXIT showing a strong green candle close to all time high
The European markets have also shown strength over the past week whereas the Asian markets remain mixed. Overall, the Indian markets seem to sync up with their global counterparts for a strong recovery in the coming week.
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