By Vikas JainWhere are We The Nifty 50 index traded volatile in first week of 2019.
The index failed to cross its 100-day moving average of 10,920 levels as weak global market had a negative sentiment on Indian market that pulled index lower to end week down by 1.2%.
However, Bank Nifty continued to outperform, led by PSU banks to end flat to positive by 0.3% with some recovery on last trading day of week.
Among sectors, auto declined by 4.5% due to poor monthly sales numbers, commodities sectors like metals and energy declined by 3.6% and 2.3%, respectively.
IT and FMCG declined by 1.7% and 1.2% for week.What is in Store Nifty50 index has being trading in a band of 10,500-10,900 levels over past eight weeks and one can expect a breakout.
We believe index will give a breakout from current levels on higher side as it is making higher bottoms on daily charts with key technical indicators like RSI and MACD are trading above average line signalling strength in index.
Crossover of 10,900 levels would push index higher to 11,200 levels with outperformance coming from sectors like autos and metals.
The trend reversal level will be 10,500, below which bullish momentum will be negated.What could Investors Do: The third-quarter results for FY19 would start from current week and it will provide individual stock opportunities especially in midcaps and smallcaps after a poor performance in CY18.Among sectors we are positive on are auto, metals and pharma as risk-reward remains favourable from current levels.(The author is Senior research analyst, Reliance Securities.)