Indian equity benchmark indices Nifty and Sensex edged up over 4% last week with each day closing positively on buying by FIIs, recovery in global markets, some cooling off in dollar index and commodity markets, easing inflation scare, Thanks for the better than expected Q1 earnings. far.
This week is going to be a heavy event so we can expect an increase in volatility. Market Will react to 30% of Nifty earnings on Monday morning as we have results Reliance, ICICI Bank, Kotakbank, and Infosys over the weekend. Apart from this, many Nifty 50 companies will announce their first quarter earnings on weekdays.
We will have July’s F&O expiry on Thursday which may also lead to volatility in the overall market.
On the global front, the outcome of the US FOMC meeting on July 27 will be the most important event and volatility in the dollar index and crude oil prices will be other important factors.
It will be interesting to see the behavior of FIIs as they become net buyers for the week over a long period of time.
Technically, market is in strong bullish momentum however 16800 is an immediate hurdle for Nifty then 200-DMA will be next important hurdle around 17000 hence 16800-17000 zone will be a holy supply zone where we can expect some profit booking. However, a decisive move above 17000 could result in a strong rally in the market. On the downside, the 100-DMA around 16500 will be an immediate support level and then 16340 will be the next important support level.
Bank Nifty holds more strength as it manages to close above its 200-DMA though 37000 level is a major trendline resistance; Above this, we can expect a major rally towards the 37500/38000 level. On the downside, 36000-35700 will act as an immediate and strong demand zone.
If we look at the derivatives data, the open interest distribution for the end of July 28 suggests a range of 16500-17000. The long exposure of FIIs to index futures has increased to 45% and the put call ratio is kept at 1.42, both indicating a positive bias.
Mr. Santosh Meena, Head of Research, Swastika Investmart Ltd.
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