The domestic equity market has been experiencing a tug of war between micro and macro-economic factors.

Despite global tensions after the US carried out aerial strikes on Syria and domestic worries of a depreciating rupee, limited fiscal flexibility and events in the runup to the elections, the market surprisingly remained resilient and maintained a range-bound movement all through the week gone by. This indicates that the benchmark indices are likely to be in a narrow trading range for want of a definitive directional trigger.

Currently, lack of momentum points to the possibility of a looming correction.

Weaker rupee is applying brakes on the rally, which is being further supported by FIIs’ selling spree. Indian IT giants posted mixed Q4 earnings with companies like Infosys reporting in-line numbers as per estimates.

However, the market did not react favourably and the stock declined immediately after result announcement, whereas TCS and Mindtree posted stellar numbers, which caused the prices to shoot up.

In spite of strong earnings, the market is in no mood to start an upward journey.

Such behaviour of the market is a warning bell for the bulls. Key events of the weekCrude oil prices touched a three-year high of $74 per barrel and long positions are rising in crude futures in the range of $75-80 a barrel.

These factors will be the reason for an upside resistance in the market, causing the rupee to depreciate and bond yields to soar.

This rising pressure on the macros will eventually trickle down to stocks. Technical OutlookThe market seems to be nearing a new resistance level.

Nifty50 is resting at a 50 per cent rise of the entire fall since last three months.

The 50% retracement level often acts as strong starting point for trend reversal. Therefore, the odds are against the bulls from a short-term point of view.

A drop in prices looks more likely in the long term, given the kind of rally we have seen so far.

Wait for a fall before initiating a long trade. Expectations for the weekThe market is in no hurry to move either way.

Every time the market reacts to negative news, it was a mature behaviour without creating panic-like situations.

It is, therefore, sensible to look out for bargains and watch sectoral trends for trading purposes.

However, a fall before and after Karnataka polls is not ruled out, and that will create an ideal opportunity for fence-sitters to begin buying quality picks for the long term. The ongoing rally is an indication that the long-term trend is intact, but the odds for a fall in the market are high in the short term.

Being just a corrective fall, on any such decline, investors should accumulate good quality stocks. The Nifty50 ended the week 0.012 per cent lower at 10,564.