Week Ahead

The BSE Sensex climbed 535 points to 65,795, and the Nifty50 jumped 206 points to 19,732, while the Nifty Midcap 100 and Smallcap 100 indices gained 2 percent and 2.7 percent in the week gone by.

Most of sectors participated in the weekly run-up, barring banking and financial services stocks.

Despite the RBI's new rule, the market is likely to maintain its positive momentum in the short term, supported by declining oil prices and moderating US yields.

Market participants will focus on the oil prices that acted as another supportive factor for rally in equity benchmarks. Oil, the biggest risk for emerging markets like India as an importer, is on a slide on the back of demand concerns, steep increase in US crude inventories and rising non-OPEC supplies.

Technically, the market seems to be looking positive given the sustainability of the Nifty above the falling resistance trendline and continuing uptrend for third consecutive week with bullish candlestick pattern formation and higher highs, higher lows formation for second straight week. Also, it holds 20-week EMA, which can be critical support for the Nifty50.

Buy the dip is likely to remain in favour as prices managed to trade above the key mark of 19600.

19,600-19,500 is expected to be immediate support for the Nifty50. If it manages to close above 19,900 then we can expect new high. Conversely, a decisive fall below 19,500 will be seen as a short-term trend reversal which can lead Nifty towards 19,300-19,100.

Options data indicated that the Nifty50 may face resistance at 19,900, which can decide the move towards 20,000-20,200 levels, with support at 19,500 mark.