Week Ahead

The market showed a drastic recovery from recent lows in the extended week ended May 18 with the benchmark index rising a couple of percentage points despite sharply increasing volatility on the other side.

The Nifty 50 rallied 447 points or 2 percent to 22,502, and the BSE Sensex closed 1,341.5 points or 1.85 percent higher at 74,006, while the broader markets outperformed benchmark indices, with the Nifty Midcap 100 and Smallcap 100 indices gained 4.7 percent and 5.6 percent, respectively.

The market, in the coming truncated week, is expected to be consolidative with a positive bias.

The release of PMI data for May from both the US and India next week will be closely monitored for further market insights. Amidst ongoing uncertainties surrounding election results and quarterly earnings, we anticipate continued volatility in the near term.

The March quarter earnings season is near the end as in the seventh week, nearly 900 companies will release their quarterly earnings including major ones like Oil and Natural Gas Corporation, Grasim Industries, Power Grid Corporation of India, Sun Pharmaceutical, ITC, Hindalco Industries, NTPC, and Divis Laboratories.

Technically, the Nifty 50 reached to important level of 22,500, the highest closing level since May 2, which is expected to play a crucial role in the market direction going ahead, as climbing decisively above the same can take the index to record high levels but falling below

the same can drag it down to 22,400-22,300.

22,200 is the key support area, while the trend seems to be in favour of bulls considering the formation of a Bullish Piercing Line pattern on the weekly charts and the index trading above all key moving averages on all time frames.