Week Ahead...

After briefly scaling past the 18,700 mark, the Nifty 50 took a breather and settled only 0.16 percent higher at 18,563 for the week ended June 9. Sensex gained 0.13 percent to end at 62,625.

The broader markets were also buoyant with Nifty Midcap 100 gaining 0.5 percent to end the week at 34,153. Nifty Smallcap 100 gained 1.17 percent. In fact, Nifty Midcap 100 touched a new high of 34,534.70.

There was both good and bad news from the Reserve Bank of India's monetary policy decision. The central bank on June 8 held interest rates, keeping the repo unchanged at 6.5 percent. But, it did not cut the inflation forecast by a large quantum.

The market is hopeful that the CPI (consumer price index) inflation for May will further moderate from its current level of 4.7 percent. Most economists have pegged headline inflation at 4.34 percent. The data will be released on June 12.

The U.S. Federal Reserve is expected to not raise interest rates for the first time in well over a year at its June 13-14 meeting.

Apart from the Federal Reserve, the European Central Bank and the Bank of Japan will also announce their interest rates decisions. ECB interest rate decision is scheduled for June 15 and BoJ's decision is on June 16.

From a technical standpoint, the Nifty is not displaying any major signs of weakness. However, at higher levels, signs of exhaustion are emerging, with negative divergence observed in momentum indicators.

The immediate and crucial support level stands at the 20-day moving average (DMA) around 18,450, and if breached, the next support level would be at 18,180. On the upside, the range of 18,800-18,888 poses as a resistance area.

Option data clearly indicated that 18,600-18,800 is expected to remain key resistance area as crossing of the same can help Nifty reclaim its record high of 18,887, whereas the Nifty may find support at 18,500-18,300 zone.