Week Ahead

The market witnessed consolidation during the week ended June 21 and closed moderately higher, continuing upward journey for three weeks in a row. After pricing in the Lok Sabha election outcome and the NDA government formation for the third time, the market seems to have started focussing on the Union Budget scheduled in the latter half of July, though it is worried about the slow progress of the monsoon.

The market in the coming week starting from June 24 will first react to the outcome of GST Council Meet announced last Saturday. Overall, the consolidation is expected to continue with a focus on global cues (including quarterly US GDP and bank stress test results) and institutional flow. The volatility is also likely to be high given the expiry of June derivative contracts next week.

The BSE Sensex was up 0.3 percent at 77,210, and the Nifty 50 rose 0.15 percent to 23,501, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.4 percent and 1 percent, respectively.

Technically, the Nifty 50 entered into consolidation mode after hitting a record high. The said consolidation and rangebound trade is expected to continue in the coming week too. For the index, 23,600-23,650 is going to be a crucial zone for further upmove towards 23,700-23,800, with support at 23,300-23,200 levels, as it hit the said zone but could not sustain above the same on a closing basis.

Overall, the trend remains positive barring intermittent profit booking and consolidation, as the index sustains above all key moving averages, and momentum indicators RSI and MACD showed a positive mood on higher timeframes.

The options data indicates that 24,000 is expected to be the key resistance mark for the Nifty 50 in the short term, while in the upcoming F&O expiry week, the resistance would be 23,500-23,700 zone, with crucial support at 23,000.