Indian stock markets have been in a range for the last three weeks. The market will look for direction from Q2 earnings and global cues. Income season started with IT income. Next week several financial and cement companies will present their second quarter results. Global markets are quite volatile, which can lead to volatility in our markets as well. In terms of global factors, macro numbers from the United States and China will be significant. US bond yields, dollar index and crude oil movement will be other global factors to watch. FIIs are selling aggressively in the cash market, but DIIs are giving good support to the market. From here it will be important to look at the institutional flows.
Looking at the derivatives data, FII short positions in index futures have come down from a record low of 87 per cent to 77 per cent, but are still in oversold territory. Nifty put-call ratio is sitting at 0.91, which is also an oversold level. The volatility index, India VIX, has again slipped below its 200-DMA, providing comfort to the bulls.
technically, nifty is in a tight range where the 100-DMA (16835) and 200-DMA (16990) clusters are acting as a support zone while the 20-DMA (17240) and 50-DMA (17490) clusters are acting as a supply. working in. region. On the weekly time frame, the 20-week SMA is proving to be a strong support for Nifty. Any decisive move from the 16800-17500 band will decide the further direction of the market.
Bank Nifty is also in a narrow range of 38500-39500 where it needs to close above 39500 for a major short-covering rally towards 40300. If it slides below the 38500 level, there will be selling pressure towards the 37500-37250 area. ,
(The author is Head of Research, Swastika Investmart. Views expressed are purely personal and not that of Mint)
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