Week Ahead

The BSE Sensex corrected 439 points to close the week at 65,721, and the Nifty50 declined 129 points to 19,517, as selling was seen in auto, banking & financial services, FMCG, and oil & gas stocks, whereas the buying in technology stocks limited losses.

The broader markets performed better than benchmarks, with the Nifty Midcap 100 and Smallcap 100 indices gaining 0.7 percent and 0.8 percent respectively.

We expect the broad rangebound action to continue in the markets with a focus next week entirely on RBI interest rate decision, while the stock-specific action will continue given we are in the last leg of quarterly earnings season.hence as usual the flow of companies announcing numbers will increase significantly next week. More than 1,800 corporates will release results next week including prominent names like Adani Ports, Coal India, Hindalco Industries, Grasim Industries, Hero Motocorp, and ONGC.

Technically Nifty50 has taken strong support at 19,300 and rebounded to close the week above 19,500 levels. The index has formed a bearish candlestick pattern by making lower highs, and lower lows for yet another week, hence unless this formation gets negated strongly, a major upside is unlikely. Till then the rangebound trade may continue.

We expect Nifty to consolidate in a broader range ahead wherein 19,100-19,300 would offer support in case of further decline while a rebound towards the 19,650-19,850 zone would attract profit taking again.

Weekly Option data indicates that 19,600-19,700 is expected to be the resistance area for the Nifty50, whereas 19,400 is likely to be an immediate support for the index.