INSUBCONTINENT EXCLUSIVE:
Defying expectations, Nifty did not take any major directional call during the week gone by
The week remained volatile with the index oscillating in a defined 230-point range throughout
However, on the weekly charts, the index has been able to keep its head above the 50-week moving average, which is at 10,757
remain eventful with the expiry of current derivative series on Thursday, followed by the presentation of the Interim Budget on Friday
There are expectations that this Interim Budget is likely to be like a full-fledged budget with general elections just a couple of months
away.
Given the events that the market will face in the coming week, the volatility will have its obvious presence felt and this may keep
the range for Nifty wider than normal.
The Indian market relatively underperformed its Asian and other global peers in the previous week
Since Nifty has kept its head above the critical support levels and with global markets stable and positive, we can once again expect a
stable start to the new week
The 10,900-10,950 zone will continue to remain an important one that Nifty will have to move past for any meaningful and sustainable upward
move.
With a stable start to the week, the 10,900 and 11,130 levels are likely to pose resistance on the upside
Downsides, if any, will find support at 10,700 and 10,650 mark.
The weekly RSI is at 49.9822; it remains neutral and shows no divergence
The weekly MACD remains bullish as it trades above its signal line; additionally, PPO too remains positive
A small engulfing bearish candle has emerged
The size of the candle is much smaller than usual, but it may potentially set some base for a bullish reversal since it has emerged near the
However, this needs confirmation on the next bar.
On close examination of the weekly charts, it is observed that Nifty is consolidating
around its 50-week moving average for over eight weeks now with higher than normal volumes
If this is read along with the narrowed trading band on the daily chart, it becomes more than evident that the market is now overdue for a
directional move on either side.
As the market awaits triggers, we suggest not the chase the upsides blindly unless a decisive move beyond
Unless this happens, all upward moves should be used to protect profits at higher levels
Purchases, if any, should be kept strictly stock specific and modest
A cautious approach is suggested for the week ahead.
In our look at Relative Rotation Graphs, we compared various sectors against CNX500,
which represents over 95 per cent the free float market cap of all the stocks listed
In the study of Relative Rotation Graph (RRG), it is observed that most of the indices like financial services, infrastructure, Bank Nifty,
NiftyMid50, consumption and PSU banks are seen taking some breather and slowing down while mildly losing their momentum against the general
markets.
These groups are expected show milder performance unless given some triggers and will be seen consolidating its position
On the other hand, the FMCG pace has reversed its way back into the leading quadrant.
Along with this, a sharp improvement in momentum is
seen in the Energy Index along with the IT index
CNX pharma, too, is seen bettering its relative momentum
These packs are expected to be collectively seen improving their performance against the broader market even while they remain in the
lagging quadrant.
The auto pack appears to be faltering again and sharply losing its momentum even though it remains in the improving
Though some stock specific gains can be expected from the Realty pack, no major show is expected from the CNXPSE, CNXMID and CNX Media
indexes in the coming week.
Important Note: RRGTM charts show you the relative strength and momentum for a group of stocks
In the above Chart, they show relative performance as against NIFTY500 Index (Broader Markets) and should not be used directly as buy or
