Week Ahead

In the week ended May 3, the market maintained its upward journey yet broadly remained rangebound, with support from March quarter earnings, subdued oil prices, and healthy monthly auto sales numbers.

The Nifty 50 rose 56 points during the past week to 22,476, and the BSE Sensex gained 148 points, at 73,878, while the broader markets were mixed, with the Nifty Midcap 100 index rising 0.6 percent and the Smallcap 100 index down 0.3 percent.

The market is expected to consolidate further with a positive bias in the coming week starting from May 6, with a focus on corporate earnings, the third phase of the Lok Sabha (LS) elections.

Market participants will continue focussing on the March quarter earnings season, which will enter its fifth week now, and has been broadly in-line with analysts' expectations. More than 300 companies will release their quarterly earnings, including key names like Dr Reddy's Laboratories, Hero MotoCorp, Larsen & Toubro, Asian Paints, State Bank of India, Cipla, Eicher Motors, and Tata Motors.

Technically, the market seems to be in consolidation mode with the hurdle for Nifty 50 at 22,800 on the higher side, and immediate support at 22,300 in the coming week. The index has formed a Bearish Engulfing candlestick pattern on the daily charts, which is a bearish reversal pattern, and there was a Doji kind of pattern formation on the weekly timeframe, indicating indecision. According to experts, if the index decisively takes out 22,800 on the higher side, then 22,950-23,000 are the levels to watch, which coincides with the upper range of the rising channel.

Weekly options data indicates that 22,700-22,800 is expected to be the resistance for Nifty 50, with support at the 22,000 level. It means the 22,000 mark is going to be crucial to watch for further downside.