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After a strong start, both the Nifty as well as Sensex lost momentum and experienced choppiness. However, with hopes of further rate cut by the Reserve Bank of India, some sectors such as banking, metals, consumer durable and realty witnessed good gains in the past week. Foreign portfolio investors (FPIs) too were net buyers.
Strong fourth quarter result announcement from the Reliance Industries could boost the indices in the early part of the week. But, with April derivatives expiry on Thursday, the indices could experience some volatile movement. Results announcement from the key-blue chip companies could also dictate intra-day trends.
Nifty 50 (7,899.3)
Last week, the Nifty 50 advanced marginally by 48.4 points or 0.6 per cent after a strong 4 per cent gain in the week before. The index breached its 200-day moving average on Monday and managed to stay above it.
Last week, the Nifty 50 advanced marginally by 48.4 points or 0.6 per cent after a strong 4 per cent gain in the week before. The index breached its 200-day moving average on Monday and managed to stay above it.
The week ahead: After an initial rally, the index remained volatile over the week with minor moves. It now appears to be pausing. The relative strength index in the daily chart features in the bullish zone and the weekly RSI is moving higher in the neutral region towards the bullish zone.
The buying interest is evident as the daily and weekly price rate of change indicators hover in the positive terrain. However, near-term volatility or a corrective decline ahead of April month derivatives expiry is likely.
Investors with a short and medium-term perspective can make use of corrections to take fresh long position with a stop-loss at 7,675 and 7,500 correspondingly. Strong move above 7,900 can take the index higher to 8,000 in the coming week. Important supports to note are at 7,772, 7,700 and then 7,600 is a crucial base.
Medium-term trend: Since registering a 52-week low at 6,825, the index has been trending upwards. It hovers well above its 21 and 50-day moving averages. However, the Nifty faces a significant resistance and trend-deciding level at 8,000. A conclusive break-out of this level is needed to alter the medium term downtrend and take the index higher to 8,100 and then to 8,175 in the coming weeks. Next significant resistance for the index is placed at 8,300. On the other hand, if the index faces difficulty in moving past 8,000, then a sideways move is possible in the band between 7,600 and 8,000. Subsequent supports below 7,600 are pegged at 7,400 and 7,250.
Sensex (25,838.1)
The key resistance at 26,000 and 200-day moving average poised at around this level limited the Sensex gains to 211 points or 0.8 per cent last week.
The key resistance at 26,000 and 200-day moving average poised at around this level limited the Sensex gains to 211 points or 0.8 per cent last week.
The week ahead: The index has formed a small spinning top candlestick pattern in the weekly chart, implying indecisiveness. Along with this, the index tests a key resistance level ahead of derivative expiry which can result in choppiness. A decisive breach of 26,000 can push the index higher to 26,300 and 26,500 in the short term horizon. Any corrective decline in the coming week can find support at the immediate base either at 25,500 or 25,000. Next support is at 24,500, which is vital. An emphatic break through of the key resistance between 26,300 and 26,500 is needed to alter the intermediate-term downtrend and accelerate the index higher to 27,200 levels. Supports below 24,500 are at 24,000 and 23,000.
Bank Nifty (16,703.4)
It was an excellent week for the Bank Nifty as the index managed to move past the key resistance at 16,250 after initial testing. Last week, the index gained 2.6 per cent, outperforming the broader indices. The index has surged 7.3 per cent over the past two weeks. But it now tests the 200-day moving average and faces resistance at 16,800. Strong rally above this hurdle can take the index northwards to the resistances at 17,000 and 17,250.
It was an excellent week for the Bank Nifty as the index managed to move past the key resistance at 16,250 after initial testing. Last week, the index gained 2.6 per cent, outperforming the broader indices. The index has surged 7.3 per cent over the past two weeks. But it now tests the 200-day moving average and faces resistance at 16,800. Strong rally above this hurdle can take the index northwards to the resistances at 17,000 and 17,250.
However, with the derivative expiry at the forefront, and strong rally in the short span of time, the index can experience profit booking and decline. So, traders with a short-term perspective should tread with caution in the coming week. Long position can be initiated above 16,800 with a stop-loss at 16,250.
But a fall below the immediate supports at 16,500 and 16,250 can pull the index down to 16,000 levels. Further decline below this level can drag the index down to 15,800 and 15,500.
Global cues
The Dow Jones Industrial Average extended its up move by gaining 106 points or 0.6 per cent to 18,003 last week. The index now tests a key resistance level at 18,000.
The Dow Jones Industrial Average extended its up move by gaining 106 points or 0.6 per cent to 18,003 last week. The index now tests a key resistance level at 18,000.
Only a decisive break of this level will reinforce the uptrend and take it up to 18,351 or even new highs. Important supports are pegged at 17,800 and 17,500. Conclusive weekly close below 17,500 can have bearish implications and drag it down to 17,200 or 17,000.
The Nikkei 225 jumped 4.3 per cent, breaking through a key hurdle at 17,000 in the previous week. It can rally further to 18,000-mark in the short term. Resistance above this level is at 18,500. Supports are pegged at 17,000 and 16,500.
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